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Information and description:
Credit history or report is a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. The term "credit reputation" can either be used synonymous to credit history or to creditscore.
When you fill out an application for credit from a bank, store or creidit card company, your information is forwarded to a credti bureau, along with constant updates on the status of your credit accounts, address or any other changes you may have made since the last time you applied for any credit.
This information is used by lenders such as credit card companies to determine an individual's or entity's credit worthiness; that is, determining an individual's or entity's means and willingness to repay an indebtedness. This helps determine whether to extend credt, and on what terms. With the adoption of risk based pricing on almost all lending in the financial services industry, this report has become even more important since it is usually the sole element used to choose the APR (annual percentage rate).
How to improve your credit rating
• Maintain a good payment record - It is very important to pay your bills on time. A lot of late payments can lower a credit history record.
• Control of debt - Lenders want to see that you are not living beyond your means. Experts estimate that non-mortgage credit payments each month should not exceed more than 15 percent of your after tax income.
• Signs of responsibility and stability - Lenders perceive things such as longevity in your home and job (at least two years) as signs of stability. Having a respected profession can improve a credit rating.
• Credit report inquiries – Keeping credit inquiries to a minimum can help your credit rating as whenever you apply for a credit card, the lender accesses your creidit rating from a credit rating agency as part of the approval process. When your creditrating is accessed, a note is made of this access on the record for two years. Credit companies perceive many inquiries on your report as a signal that you are looking for loans and will possibly consider you a poor creditrisk. To keep your credit reprot rating good, try not to let companies access your history unnecessarily.
• Keep cards you don't use - Although it is believed that having too many credit cards can have an adverse affect on your rcedit score, closing lines of credit can not improve your score and may even hurt it. The credit rating formula looks at the difference between the amount of credit you have and the amount you're using, so reducing your total creidit can make the balance you carry seem larger and take points off your score.
credet erport, credti reprto, cerdit, creidt, creidit,
See
also:
• Adverse Credit History
• Annual percentage rate
• Interest 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 "Credit Report".
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