A credit history shows the borrower’s record of responsible repayment of loans. In a credit record, a record of a person’s credit history is mentioned. A borrower takes credit from various sources like credit cards, banks, companies and government. A person’s credit score is the score of the credit report and other information to predict future delinquency. Whenever a person takes the loan from a bank or any other institution, his information is forwarded to the credit bureau. The Bureau save all these information, these are very helpful to the money-lenders, creditors and others who will provide a loan to the person. The willingness to pay back the debt is checked. Lenders see if the borrower has missed any debt or if the borrower has not been paying the monthly installments. The following are the basis on which the credit score is calculated:
• Payment history: the lenders will see how much obligations the borrower has fulfilled. If there is any negative information, then the score will get reduced. If the item is old and then there is a default, then such a case will be treated with less severity and vice versa
• Debt: this category considers the amount and type of debt carried on by a person. Three types of debt are considered viz., revolving debt, installment debt and open debt.
• Time factor: time factor is considered to see how old is the debt if it is old and well obligated to then the scores will increase or else it will be the other way round.
• The diversity of accounts: if a borrower has many types of accounts, then his score will be high as it shows that the person can manage different accounts.
• Inquiries for new debts are also considered as it shows how frequently a person requires credit, what purpose he requires them for, etc.
An investor or financier provides loan only after being satisfied with the credit history. For a person who wants personal loans for people with bad credit history might prove fatal. There are several things that he will need to comply to obtain loans. However, with the help of mortgage broker you will be able to avail the personal loans Inspite of your bad credit score or bad credit rating.
Bad credit history
Bad credit history is when a person fails to pay is his loan timely, has been a defaulter many a times, Bad credit describes a past failure to keep up with your credit agreements and the inability to get approved for new credit. When you have bad credit, lenders are afraid of lending to you because you may fall behind on repaying any loan or money you’re given. Therefore, it becomes very much necessary for you to keep your credit history clean. Try and remove all the negative information from your credit card and posting positive information by adding new accounts and paying them on time.
