Tuesday, 12 February 2013

Why checking your credit history is important

Ok, you are now concerned about your credit history, if not then yes it is absolutely very important to think about it.

So to understand what is credit history, we need to think as a money lender as to understand first what is the need for a credit history. Banks and lenders are basically required to establish wheather a borrower has a capacity to repay the loan with interest and in time. To gain such a critical and substancial data, they need to have a centralised data base where someone's personal bank history can be accesed, but generally, banks can only access to thier own account of a person excluding thier other financial commitments and past history of repayments or arriors with other lenders because it is against law or banks are very relectant to share the personal data of their customers to each other.

So there is need for a centralised data centre where THERE WILL BE A CREDIT SCORE CALCULATED based on the history of your financial activities be it the loan, credit cards, bank accounts, no of years you are being holding such account, repayments, missed payment, overdraft, mortgage accounts, its details, phone contracts, direct debit details, addresses you lived in the past and so on.

To fullfill the gap companies like experian, equiafax, and checkmyfile are emerged and they are offering one month free trial to check your credit history, also to clarify any missing data. Based on the above details of yours they calculate a generic value to asertain your repayment capacity.

Most of the lenders use two of the above companies to verify a credit history and score prior to sanction the loan, now a days major companies in the UK and US verify credit score of a prospective employee before making a job offer.

So it is vital to check and monitor your credit history, especially if you are planning to get a loan in a near future. click here to get a cashback for checking your credit history on trial basis, but make sure that you unsubscripe your account within the notice period if you don't want to continue with your credit history account on a continuos basis. But most of the credit history checking companies are very genuine to cancel the trial accounts.

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Courtesy: google pics.

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