Credit history

Credit according to the financial experts, is a
contractual agreement in which a borrower receives
something of value at a particular point of time and
agrees to repay the lender at some later date.

Credit is believed to determine the borrowing capacity
of an individual or company. Credit history is the
record of someone or their organization’s financial
dealings based on credit.

It is an account of their past borrowing and repaying.
It also contains facts about late payments and
bankruptcy, if there is any.

A credit reputation can also be used as an alternative
to credit history. Credit history is generally
maintained by credit bureaus set up in several
countries.

When a customer interested in obtaining credit applies
for credit from a bank, whether it is a nationalized
bank or private bank, his personal inputs are
forwarded to these credit bureaus.

From time to time these bureaus updates the status of
the credit holders’ accounts, cross checks their
personal information, like their address or contact
numbers and records even the change of names, if there
is any.

All these detailed information are required to
understand the applicant’s credit worthiness. Moreover
these records are maintained to keep tract of the
person’s whereabouts and also to make sure that he
pays his debts in the stipulated period as mentions in
the credit related agreements.

Credits and associated financial dealings help in
boosting a country’s financial growth. Credit history
further helps to determine annual percentage rate of a
country’s financial dealings.

Although it’s hard to keep your credit record clean,
in today’s world it is almost mandatory.