Your Credit score is a capable number that influences your day to day life in ways you might not even imagine. An ever-increasing number of organizations are beginning to utilize your Credit Score to settle on choices about you. Your score is utilized to set your financing costs on Visas and loans, even to choose whether you get endorsed for those Master cards and loans.
A credit scored describes whether the customer has a history of financial stability and responsible management of credits. The credit score can range from 300 to 850.
A credit history is the report of a customer’s record of repayment of debts and interests. A credit history is evaluated from a wide range of sources, including banks, agencies, and administrations. When a customer applies for a loan, the first thing the banks and lenders consider is the credit history. A few delayed payments will not affect the credit score. The most common factor that affects the credit history is the late payment of credit cards. Maintaining a good credit history is mandatory to maintain a good credit score. A lender usually considers the credit score to decide if the customer is economically trustworthy and to evaluate the creditworthiness of the customer.
The highest contributor to the total credit score is the history of payment. Paying the debts and interests on time is a most important aspect in evaluating the customer’s credit score. A credit score is greatly affected by these factors. If the credit history of the customer is not valuable, the customer’s loan applications may be rejected. If the person maintains a good credit history which eventually leads to good credit scores, the lender or bank may help the customer with various concessions like low-interest rate, extended payment duration, quick approval of loans.
Banks and lenders consider the customers who max out the credit card limit are the customers who will not be able to handle debts and payments responsibly. In order to maintain good credit history, the customer should maintain low credit balances. Paying the bills on time and carrying low credit card balances can help the customers maintain a good credit history.
When the customer did not pay the mortgage as instructed the scenario is defined as a foreclosure. The bank or lender can take possession of the borrower’s house or other properties.
When the customer cannot handle the debts, the bank can declare bankruptcy. Bankruptcy remains in the credit history for ten years.