Credit History
Well, let's start from basics. So called, credit history records are, shortly saying, informations about your financial past. All that historical informations about you, are important records because, the credit bureaus use it to calculate your credit score.
All kind of lenders, use such credit scores to determaine whether to lend you money or not.
Usually, credit score is a way, lenders determaine, how much interest they will charge you. So, you see how much important credit score is for your personal and family finances.
You should constantly try to improve your credit score and thus, increase your chances of being approved for loans at lower interest rates in the future. How ? Firstly, by understanding what kind of 'things' appear in your credit history and thus, how they impact your personal credit score.
All kind of lenders, use such credit scores to determaine whether to lend you money or not.
Usually, credit score is a way, lenders determaine, how much interest they will charge you. So, you see how much important credit score is for your personal and family finances.
You should constantly try to improve your credit score and thus, increase your chances of being approved for loans at lower interest rates in the future. How ? Firstly, by understanding what kind of 'things' appear in your credit history and thus, how they impact your personal credit score.
Basic information which are included in your personal credit history will show, how you have made payments on your bills and how you took care about your liabilities. It shows also, whether you carry balances on your accounts and credit limits for your different loans, including credit cards, as well.
In overall, term loans can include credit cards, mortgages, personal loans, car loans, student loans, to name a few important. Your personal credit history will also show, all your new credit cards or loans applications, as well, how much credit you have applied for, before.
In overall, term loans can include credit cards, mortgages, personal loans, car loans, student loans, to name a few important. Your personal credit history will also show, all your new credit cards or loans applications, as well, how much credit you have applied for, before.
If you will found some incorrect financial records, included in your credit history, do not hesitate to clarify such informations. It should be done also when, some kind of information are not included in your credit history like your savings, checking accounts or investment accounts. For example, having stock brokerage account with few thousand dollars in shares, could improve your credit score. Other information, such as your age, may appear on your credit report but will not affect your credit score.
There are three major credit bureaus in the United States : Equifax, TransUnion and Experian.
All the financial companies collect information about your personal finances and report it to the credit bureaus. It especially happen to credit cards companies, which send reports to the credit bureaus whether, you paid your balance on time and in full, if you only paid a small portion of the amount due, paid late, or didn't pay at all.
All the financial companies collect information about your personal finances and report it to the credit bureaus. It especially happen to credit cards companies, which send reports to the credit bureaus whether, you paid your balance on time and in full, if you only paid a small portion of the amount due, paid late, or didn't pay at all.
So, saying shortly, all the credit bureaus use such financial information to calculate your credit score. Especially, your payment history accounts for some 35 % of your personal credit score. Another 30 % of your credit score is depend on the factor, how much money (in total) you owe actually. The length of your personal credit history will represnt 15 %of your score. Another 10 % of your score depends on your usage of different types of credit. At the end, another 10 % of your score depends on, the amount of credit you've recently applied for.
This is not exactly the right formula but, saying shortly : the better your track record of paying on time and not owing significant amounts of debt, the higher your credit score. That's it. Very simply.
This is not exactly the right formula but, saying shortly : the better your track record of paying on time and not owing significant amounts of debt, the higher your credit score. That's it. Very simply.
Copyright 2010-2011 by Dariusz Kudłaty
