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Information and description:
Adverse Credit History, also called sub-prime credit history, non-status credit history, impaired credit history, poor credit history and bad credit history, is a credit history that is judged as being adverse as the applicant has a history of unsatisfactory credit transactions. The term can apply to a corporate credit history but is more frequently used in relation to personal credit.
Your credit history is constantly tracked by credit rating agencies. They assemble a record of all your borrowing, track your repayments and record any actions taken to recover overdue monies. For individuals they also assemble a wide range of personal information.
This information is sold by the credit agencies to organisations that are considering whether to offer creidit to individuals or companies.
All the credit agencies also offer a supplemental service called credit scoring. Credit scoring statistically analyses a credit history and assesses the likelihood that a borrower will repay borrowed money. The higher the score, the better the crdeit history and the higher the probability that the loan will be repaid on time.
It is not the credit agencies that decide whether a credit history is adverse. It is the individual credit companies which make that decision. Each lender has its own credit policy through which they delineate the level of credit risk they are prepared to accept and at what interest rate.
If the applicants’ credit score attains a pass level, credit will be offered on the credit company’s normal terms. If the credit score falls below a pass level, the applicant will be described as having an adverse credit history. Then, conditional upon how low the applicant has scored and the credit company’s lending policy, the applicant will be either refused, or offered a lower credit facility, or offered a higher rate of interest.
See
also:
Equifax
Fair Credit Reporting Act
TransUnion
Credit card
Credit rating agency
Credit reference agency
Identity theft
Credit history
• Interest rate
nominal interest rate
Effective annual rate
• Adverse Credit History
• Annual percentage rate
Credit card
Credit rating agency
Credit reference agency
• Credit Score
Fair Credit Reporting Act
Identity theft
•
List
of Finance Topics
• Bankruptcy
• Debt
Consolidation
• Foreclosure
• Personal
Finance
• Student
Loan Consolidate
• Experian
• Creditor
• Credit Counseling
This
article is licensed under the GNU
Free Documentation License.
It uses material from the Wikipedia
article "Adverse Credit History".
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