Complete Guide on How to Check Your Entire Credit History

The state of your credit greatly influences your financial future. You can be eligible for loans with low-interest rates if your credit is in good standing, which could result in long-term savings. Having bad credit might make it difficult for you to fit the criteria for credit cards with the greatest benefits and rates and get credit for a major purchase.

The credit bureaus in the nation use several variables, including the duration of your credit file and payback history, to determine your credit score. All this combined is your credit history.

A better credit score may give you positive considerations when applying for a credit card or loan from a bank, such as a larger loan amount, a reduced interest rate, and a longer repayment period. You can easily get a larger amount of business loans with a better credit history.

Steps to Check Your Credit History

Checking your credit report can give you an excellent understanding of your credit history. You must complete the following actions to obtain a record of your Report:

• Log on to the website of the credit bureaus and submit an online request for a copy of your credit report.
• Provide the necessary papers, including one ID and one address verification.
• Scan the papers and upload them.
• Pay online for your transaction.
• Suppose the supporting documents are accepted, and payment is made. In that case, you will receive your credit report by email within a day.

What Exact Factors Include in Calculating a Credit Score?

The major credit information bureaus use different methods to construct credit history. The general criteria mentioned below are used to determine your credit score:

Amount of credit

30% of your credit score is based on how much money you owe on credit cards and loans like business loans. Your credit score would suffer if you have a large balance and have used up all of your credit card’s available credit. In comparison, low balances and on-time payments would boost the score.

Payment record

35% of your credit score is determined by how you’ve paid your bills. Your payment history demonstrates if you have paid your bills on time, whether you have made late payments in the past, and whether you have paid them days beyond the specified deadline. Consequently, you will receive a higher score if you make more on-time payments. To avoid damaging your credit score, keep in mind you never skip a payment. This makes your credit history.

The number of credit products in the portfolio

The number of products you have and the categories of products you have accounted for 10% of your credit score. Using several products, such as business loans, home loans, and credit cards, might improve your credit score.

The use of credit

The last 10% is based on your most recent credit activity. The information about starting or applying for multiple accounts, your repayment history, the business loan types you have requested, and how much of your credit limit you have used are all considered credit activity.

Duration of credit record

The duration of your credit history determines 15% of your credit score. A long history of on-time payments will undoubtedly result in a higher credit score. 

What Lowers Your Credit Score?

It has been widely known that carrying large credit card debt may dramatically lower your credit score. In addition to that, several different things might lower your credit score:

• Your credit score might be drastically lowered by running out of money.
• Disregarding your credit card or loan payments in full.
• Overdue credit card payments after the due date
• If you fail to make payments, lenders will engage third-party collection agencies to get you to pay back the loan. Receiving a collection account has a negative impact on your credit score.
• When credit card payments are not paid on schedule, creditors charge off accounts. Having your account disabled is among the worst things that may happen to your credit score.
• Closing outdated credit cards restrict the amount of your credit history. This will have an unfavourable consequence on your credit score.
• Your credit score drops if you apply for several credit cards or business loans. Limiting a lot of requests is a good idea.
• Your credit score will suffer if you just have one sort of credit account. Therefore, you should maintain a balance between credit card debt and loans while consistently making on-time payments.

Advantages of a High Credit Score

• Increased Affordability of Loans 

Processing fees and other costs are tacked onto loans. You can negotiate your way out of some of these fees with a strong credit score.

• Prompt Loan Approval  

Your loan application will go more quickly if your credit score is strong. Banks could swiftly and easily approve your application for all business loan types.

• Best Rate of interest 

You may negotiate a reduced interest rate on credit cards and loans if you have a high credit score.

• Grab the Ultimate Credit Card 

You can get the finest credit cards with a good credit score. Benefit from having a card with lots of features.

Check your credit score to determine if you qualify for these perks as soon as possible.

Conclusion

A good credit score may empower you and assist you in reaching your financial objectives, such as obtaining a low-interest personal loan or a business loan to reduce your credit card debt or purchasing your first property. 

Understanding your credit score, where you fall in the credit score range, the contents of your credit history and the steps you can take to improve or keep your credit status are the first steps in ensuring superior credit status. To better manage your finances and maximise your credit perspective, check your credit score frequently and examine your credit report once a year. 

Still, have questions about credit history? Then, heed some guidance from Piramal Finance professionals. They will be able to guide you to a better solution because they will comprehend your needs.