From a financial point of view, credit history is the most important factor that you should take care of if you want to access loans and other instruments.
Throughout our adult and productive life, there are many goals that at some point we set ourselves to achieve, a house, a vehicle, credit cards and financing for studies, among others.
Basically, credit history is your cover letter to financial institutions. Therefore, you must ensure that it is as impeccable as possible.
Do you want to know what factors damage your credit history? Here are some reasons, but first let’s clarify its concept and what would be the consequences of having a negative record.
What is credit history?
The credit history is the report issued by a specialized institution, in Mexico, the Credit Bureau, which contains payment data and non-payment of a person and their ability to pay off loans. In short, we can say that it is your financial background.
This report is passed to all the institutions of the financial system to know in depth the behavior of each client with respect to their instruments.
Banks rely on data emanating from the history to make their credit decisions. Hence, maintaining a good financial background should become a priority.
How does credit history affect me?
With the aforementioned, it is clear that the credit history will be used by the banks to know if they can trust a customer or not. What doors can you close if you have a negative record? Continue reading.
The credit history can play in our favor or against in case we are thinking, for example, in requesting any type of credit.
If we have a negative record, it will be impossible to access credit cards, car loans or financing for businesses and enterprises.
What affects my credit history?
It is likely that the first thing that comes to mind when they mention a bad credit history , is the delay of payments. It is certainly a relevant aspect, but it is not the only thing.
Next, we tell you what other behaviors could affect your credit score.
Do not pay your credit cards on time
One of the most common reasons why people get a bad reputation on a financial level, is to incur delays with the payments of their commitments .
The bank lends you money through the different financial instruments it offers, but it is your duty that after having used your loan, you pay fees plus interest on the dates established by the entity.
If you are late with payments you fall into default and this negative information will be registered in the Credit Bureau.
Not have active credits
Believe it or not , not having active credits can deteriorate your financial trajectory as a customer, even if you have managed to meet your commitments in the past.
But why can this affect me so much? If you do not have active loans, it is difficult for banks to evaluate and measure your financial behavior in an updated way.
In the absence of current data, banks cannot be sure if your good financial behavior remains current or if you have changed that status.
What is recommended? Try to have at least one active credit card and associated with it a cell phone payment plan or cable TV plan. In this way, the bank has updated information about your behavior.
Apply for many credits at once
Avoid having too many credits at once, especially if you don’t need them, don’t use loans as a whim. Suppose that six months ago you were granted two credit cards and just a month ago you got financing for a car.
This far from benefiting you will only give the impression, before the bank, that you do not give a break to the credits. Even the institution may fear that at some point you lack solvency to meet your commitments to the amount of parallel loans.
What can help you have a good financial image?
- Know your ability to pay before applying for credits
- Do not overdraft the CT
- Pay on time
- Pay more than the minimum
- Have credits and make use of them
- Use credits with responsibility
- Build a fast credit history
If you think big and long term you will make your credit history one of your priorities. A good record will open the doors to credit cards and larger loans, either to buy a house or open a business.
You should not see the credits with fear, they are not dangerous or have to mean a problem if you keep your finances in order and fulfill your commitments.
On the other hand, if you already have a credit but have problems paying it and meet the fees on time , then we recommend you evaluate the possibilities offered by the market to get out of that situation.
A good option is the service offered by Small Lender, through which you can defer the balance of your credit card and get more comfortable terms to settle the debt .
Hopefully these tips have been very useful for maintaining a good credit history . Remember that you are responsible for your financial behavior and it is worth making every effort to achieve an impeccable record.