What is credit history and what is it for?

Similarly, if you have a debit or payroll card, you can make purchases to generate history, or, by requesting a credit card, preferably at the bank that receives your payroll card.
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Do you know what credit history is? It is the information that summarizes your behavior as a beneficiary of at least one loan and will serve to know the level of risk that is assumed when granting you a new loan.

It is likely that you have your own credit history, which is activated when contracting a service with a company (telephone, television, Internet) or when applying for a credit or departmental card. But what is credit history for? This history is used by companies to evaluate your effectiveness as a client, if you usually pay on time, if you pay an additional amount than requested or even if you do not issue your payments on time or do not cover the payments required periodically. If a person has a positive credit history from 18 to 25 years old, they have a greater chance of having better offers  when applying for a mortgage loanthat suits your needs, otherwise, you will not enjoy these benefits, even if the person has good financial habits, but they have not been reflected in a credit history or in the financial system.

It is important to point out that mishandling your payments to services contracted in your name or your credit cards could lead you to the credit bureau, which is also a reference when checking your credit history. The most important thing is to make your payments on time and not commit to expenses that your finances do not allow you. According to what is indicated by the Condusef, it is recommended that you should allocate up to 30% of your income to expenses made by credit cards, departmentals or payment of services. By following this basic financial rule, your recurring expenses or the percentage of your savings or what is reserved for emergency expenses will not be affected.

Discover what credit history is for and its importance

  • What is meant by credit history?
  • How can I start my credit history?
  • Why is it important to have a good credit history?
  • How to get a good credit history?
  • Can my credit history influence if I look for a mortgage?
  • Can I buy a house if I have bad credit?
  • Is it possible to improve my credit history?

What is meant by credit history?

The credit history is a report issued by the Credit Bureau, in order to monitor the loans that a person has requested, if they have debts regarding their credit or if they are punctual when making their payments. This information is used to be consulted by banks or financial institutions that are analyzing to provide you with some type of credit or financing.

How can I start my credit history?

It is likely that you have already started your credit history and you may not know it. Your history can start by contracting a plan with a cell phone company, or by requesting a department store card that you report to the credit bureau. Other ways are hiring services such as cable television, internet or landline, among others. Paying the receipts that appear in your name on time will benefit your prestige before the Credit Bureau.

Similarly, if you have a debit or payroll card, you can make purchases to generate history, or, by requesting a credit card, preferably at the bank that receives your payroll card.

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Why is it important to have a good credit history?

The importance of having a good credit history lies in the possibilities that will open or close when a bank analyzes your history. If you have a positive credit rating, you could receive better opportunities for different types of credit, a greater capacity for your mortgage credit, better levels of credit cards, longer terms to pay your loan or your mortgage credit, etc. On the other hand, it is also important that you have a credit history, because if you do not have it, you could need it to complement a mortgage loan, the home repairs that you already live in or, for an emergency or a financial unforeseen, it Which will prevent you from having to resort to more risky solutions such as pawns or loans with high commissions.

How to get a good credit history?

In order for your credit history to have a positive rating, it will be necessary to make all your payments on time. One way to ensure payment of service payments is by direct debiting your payments with a card in your name. Remember also to pay the monthly amount required to not generate interest, instead of only making the minimum payment requested in your account statement, since this will generate more interest and lengthen the period of your debt.

Can my credit history influence if I look for a mortgage?

This is one of the most important reasons to have a good credit history, since, when applying for a loan, the financial institution will evaluate the degree of risk or benefit that they will have when providing you with a loan. If you have a good rating issued by the credit bureau, you can easily apply for a mortgage loan, even with a preferential interest rate or with a lower monthly payment. On some occasions, the bank with which you have contracted a credit card will offer you credits that could be used at some point.

Can I buy a house if I have bad credit?

Although it is possible to apply for a mortgage loan with a bad credit history, several difficulties will arise for this application, since the holder will not be able to choose between different loans and will not have a preferential interest rate nor will he be able to decide terms, he will have to adapt to what the bank offers you, which on different occasions can be counterproductive to your financial capabilities. In fact, loan rates that do not require a credit history can raise your interest up to an additional 15%.

Is it possible to improve my credit history?

If on any occasion you came to appear in the credit bureau with a bad rating, it does not mean that you will be permanently placed with that rating. Depending on the situation, the information could be updated in a period of up to 5 years, however, it is important that you do not resort to more arrears or defaults with banks or other services, which could also affect your credit rating.

Remember that, in order to have a good credit history, it will be necessary to make payments for services and your cards on time, also that you should not have many credit cards or loans, since these will commit you to invest more money in paying your debts, affecting your finances and putting your credit rating at risk. Whatever your option before applying for a mortgage loan, remember that in the  Vivanuncios  portal you  will  find the best options to rent or buy houses and apartments.

 

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