Credit Card History - Guide

Your Credit Card History And Personal Credit Report

The success of your credit card application is largely dependent upon 2 broad factors; your history of credit and your personal credit report/credit rating.

What Is Your Credit History?

Your credit history is simply a record of your past pattern of both borrowing and repaying credit. This record will form the basis of your credit report, (which is a file that has been compiled on you) by a credit reference agency or credit bureau.

Some of the information contained in personal credit reports will include:

  • The number of credit accounts you have
  • When you opened each credit account
  • The amount of credit that has been extended to you on each
  • When each account was/is due to be repaid
  • How you have conducted your credit account
  • Whether there have been any missed or late payments
  • Whether you have been bankrupt
  • Any disputes that have arisen in relation to your credit card credit use    or transaction payments

    In addition to the above, your credit card history or credit report will contain other personal information such as your date of birth, employer's details, your social security number. If you have not previously applied for credit or for a credit card - no history exists and this will be noted also.

    Assuming you have completed an application for credit card with either a credit card company or for a store credit card, your information is then forwarded onto a credit bureau (US) or a credit reference agency (UK).

    This new information will in effect update any existing information already held by the credit bureau or credit reference agency. For instance, any change of name, address, new credit transactions etc., since you last applied for credit.

    How Is Your Credit Card History Or Credit History Report Information Used?

    The credit report information that is held by credit reference agencies or credit bureaus, is used by various credit lenders - from banks, credit card companies, to store card suppliers etc.,

    Your credit card history or credit report will help to assess and determine in creditors' eyes, your level of credit worthiness - which ultimately is your ability and motivation to repay any credit borrowing, as well as helping the credit card companies to decide on the terms and basis on which they will extend credit to you.

    Personal credit reports and in particular, your credit card history should therefore be very well taken care of. This is especially so, since credit card companies have adopted a risk-based credit advance system on lending, which effectively means that individuals or businesses with healthy credit ratings and credit history reports are deemed a better risk and this will be reflected in the more favourable rate of interest (APR) they are awarded.

    This is important information for you, since, in addition to your past credit, your credit history report will contain information on all your current activities such as loan or credit card credit applications. Your credit history will of course also note, if when you apply for credit cards, no credit history exist on account that you are new to borrowing credit.

    Each application for credit cards that you make, is logged in the credit reporting system. Should your applications be too frequent or even if you make multiple credit card applications, this can give the impression that you are in desperate need of credit and can most definately go against you in any decision taken to advance you a credit card.

    Bear in mind also that any instances of bankruptcy, foreclosures, account judgments, or anything else in the public domain that points to your being an adverse credit risk, will be deemed relevant to your credit card history and as such, will be reflected in your personal credit card report. This of course will have a significant impact on your credit-worthiness.

    The content on this site is purely for information purposes only and is not intended to replace your seeking professional financial advice.

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