When a person wants to take out a loan from a bank or other lenders, their credit history matters. The report helps determine how risky it is to lend to the borrower. Therefore, good credit history can help them get significant online credit at a favorable interest rate.
But how can a person know their credit history, and what does the report entail? Keep reading the article to learn more!
What Entails a Credit History Report
The report shows the credits a person has taken from bank or credit card accounts. Besides, it reflects the current online credit agreements or utility company payment records. It also shows an individual’s repayment record, if they repay on time and in full amount. Finally, if they have missed any payment or been delayed, the record will show such for at least six years.
It also reveals their public record information. It reveals details about bankruptcies, home repossessions, individual voluntary agreements, and Debt Relief Orders. They stay in a person’s credit history report for at least six years.
The credit history also reveals a person’s current account provider. However, it only reflects details of overdraft information. Additionally, if any person is linked to the credit history owner, their details will appear in the report.
Other details recorded include the owner’s name, date of birth, and current and previous address. It also shows if they have committed any fraud or if someone else stole their identity and committed a crime.
How to Check Credit History
An individual will need to check their credit history from time to time. Usually, CRAs are in charge of providing people with their credit history for free. The three main CRAs are Experian, Equifax, and TransUnion.
For accurate information, a person can request a copy from all three organs, especially if they have never applied for the report before or it has been a while. This is because they may be an error due to different information from an individual’s online credit provider.
A person can request their credit history report as often as they like. Besides, some CRAs offer comprehensive reports at a fee when one signs up.
The Importance of Credit History Report
A person may not understand the importance of their credit history until the time they want to borrow online credit. Most lenders, including banks, check on one’s credit history to determine if they are worth the loan.
Lenders check whether one can repay their credits on time because no one wants to give their money to someone who always delays their payments. Besides, it will tell if they pay their bills on time and in full.
Once the lender goes through the report, they decide whether they will give the borrower a loan or credit card. Therefore, if a person’s credit history is poor, they may not qualify for some loans.
On the other hand, some employers look at an individual’s credit history to check on trustworthiness when applying for a job. Also, some insurance companies and cell phone companies check people’s credit history when giving them services.
Good credit history is worth it because one may need online credit at some point in their lifetime. Besides, a person needs to check their credit history often because it doesn’t cost their credit rating.
If a person has good credit, that is perfect, and they need to keep doing it. However, if someone has a poor report, they can work on it. They need to pay all the bills in their credit history on time. Besides, if they have existing online credit, they should repay the full amount on time.
Relationship Between Credit History and Credit Score
A credit score is a number that matches someone’s credit history. If a person has a good credit history, their credit score will automatically be good.
An individual can get their credit history report free from CRAs. However, they need to pay to get their credit score. Numerous online platforms provide credit score calculation services at a fee.
Every person needs to check their credit history regularly because it is crucial when you want to take out an online credit. Besides, a person needs to keep working on their report to gain a good reputation when approaching a lender.
One can get their credit history report from the three major CRAs: Equifax, Experian, and TransUnion. There are no charges for obtaining a copy. Besides, a person can request it as often as they want without compromising their credit rating.