Improving your Credit History Report

A credit history report is a record which provides information on an individual or company’s monetary borrowings and repayments and also the information regarding late payments and bankruptcy. The term credit history is also called referred to as a credit score or credit rating. 

When a person applies for a credit facility from a bank, financial institution, store or credit card company, the credit history of the person is sent to the credit bureau. Constant updates along with the status of his credit accounts, address, and any other changes that has taken place since his first credit application are forwarded to the bureau to keep the report current. 

This information from the credit history gives the credit card company an idea about the individual’s worthiness and willingness to repayment of dues. The credit report also helps them to determine whether to extend credit facility and the terms related to it.

There are a number of ways that you can improve your credit history report:

1. A good payment record should be maintained to prevent negative entries on your credit history report. Late payments of bills leads to a poor credit rating and problems obtaining loans and other credit, as well as other services that rely on a credit check.

2. Lenders always check the credit history to see that a person is not living beyond his means. As a guide, the non-mortgage credit payments on a credit history report should not exceed more than 15 percent of after tax income. 

3. Lenders also look to the credit history report for responsibility and employment stability. A steady profession can improve the person’s credit rating as it gives lenders confidence that the person will be able to afford repayments.

4. Credit enquiries should be kept to a minimum as the lenders access the person’s credit history report and ratings from the credit rating agency during the approval process. Whenever a person’s credit rating is accessed, a note is made in the credit history report. To keep a good credit history report, you should avoid giving credit card companies reason to access the credit history unnecessarily frequently.

5. Keeping too many credit cards give adverse effect on the person’s credit history. The credit rating formula looks out for the difference between the amount of credit a person has and the amount he is using. Reducing the total credit can improve the credit rating immensely.