Credit History: An Important Document You Can’t Deny

   

Credit history is simply a record to all your activities in the past in relation with loan and debt. It’s not only all your personal loan, homeloan/mortgage, car loan or credit card account that you apply are there, it’s may also contain all the subscription that you have such your post-paid mobile account and even electricity/gas account.  And the most important content is what have you done with all those accounts. Such as:  have you ever not paying your rent or mortgage? Have you ever declare yourself bankrupt? How many times you did not pay your bill (or even late paying your bill) ?, etc. Yes, all of those information are available to all company, of course with your consent. Can you start feeling its importance ?

How It Works

On every country, there will be a company that their business is to gathering all kind of credit data for personal or business. We just call these companies “credit bureau“. Some of the credit bureaus are listed below.

Once a credit bureau is established, all other companies on that country will simply use their services.For example:

• You go to a mobile phone company to get an post-paid account (means you will be billed monthly after/post you use the phone in previous month).
• Because it’s a post paid, there is a possibility that someone doesn’t pay the bill after they use it, so the company decides to use credit check policy.
• This means, with your consent, they will lodge your detail to the credit bureau to check whether you have any problem in the past. At the same time, the credit bureau also record this inquiry on your credit history.
• If your history is clean (no unpaid bill, no “bad credit”, etc…) they will say that you pass the credit check. If something nasty found on your history, they may refuse to sign you up to their service , asking for deposit/other guarantee before providing the service -or- even ask you to do ‘prepaid’ only, -or- even report you to the police if the history is the serious one.
• Then in the future, if you ever have unpaid bill (usually after several reminder and some communication) they will be able to report your unpaid bill to the credit bureau and now your credit history is stained.

Why It’s Important To You To Have The Latest Credit History

Check Your Credit History

Checking credit history is one effective way for any company to check whether they will be expecting problem from you. The pretext is that if you ever have unpaid bill before, or ever declare a bankruptcy before, the chance of you to repeat that problem is much higher than the one never did it. So, for any company, it’s in their interest to deal mostly with the one with clean record rather than with the problematic one.

Therefore, it’s very important for you to know the latest information on your credit history, because:

• If you have clean credit history, you know that if ever you apply for credit card, mortgage/homeloan or other loan there will be no problem from this factor.
• You know roughly why you have been rejected for a service or loan
• You can correct if some inaccurate entry is lodged against your credit history (Remember, many people have the same name even date of birth, so there is possibility an entry is mistakenly recorded on wrong history)
• You know if someone make some false inquiry/application without your knowledge

What To Do

1. If you have never see your credit history, now it’s the time to get yours. Contact your credit bureau (usually they have online service) and if you’re not in a hurry, you can get your latest credit history free of charge
2. If you can afford additional cost, subscribe credit history alert from your credit bureau. With this you will be notified the moment a company make inquiry/accessing your credit history. Or you can just make sure every year you have the latest copy of your credit history.

Conclusion

At the end, your financial situation is totally your own responsibility. Not other people. So, you need to be very vigilant of the content of the credit history as that is your actual reputation in financial world. It’s your finance, take good care of it!

Hope this helps.

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Denis Kristanda  

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