What is a Credit history?
Credit history, as the name suggests, gives information about the past credit records of a person or a company. It is sometimes also called credit report. When a person or a company applies for a loan or applies for a credit card, it becomes very important as the bank or the financial institution to which the person has applied for the loan will get the personís credit report and analyze it. In most cases, only if the credit report is satisfactory will the loan be sanctioned or the credit card is granted. So it is very important to maintain a good credit status as we never know when we might need it.
Most countries employ this policy to check the credibility of their customers. Nowadays almost everyone uses a credit card. It is no big deal to get a credit card today as most banks offer their customers this service. However, what is more important is that the customer should be able to repay his or her dues on time. As more and more people do not repay their loans or at least do not do so on time, the Credit history becomes very important. Most banks face the problem of not being able to get back their money from their customers. This is the reason why they are more careful nowadays to check the credit report of the person before sanctioning a loan or granting the applicant with a credit card.
There are several agencies which keep track of a personís credit condition. Whenever the bank receives an application for a loan or for a credit card, they forward the information of the customers to the credit bureau which in return sends the history of the person to the bank. Depending on past history of the person, the bank takes the decision.
In Canada, Equifax Canada
and TransUnion Canada
are two such credit bureaus which maintain the information regarding a personís Credit history. And this credit report is available to the customer also. Whenever a person wants to view his or her credit report, he can make a request to the bureau in writing and he will get his report by mail. In Canada, a person can make a request to view his credit report any number of times in a year unlike in some other countries. The only thing that needs to be done is that the request should be given in writing.
If a person has a bad status with respect to credit, it does not mean that he will never be able to get a loan or a credit card. There are several ways by which a person can improve his or her status. You could always talk to the officials at the bank
into believing that you are a risk that is worth taking. When you have a bad Credit history, you should be very careful to not make it any worse. Always ensure that you make your payments on time and stick to your end of the bargain.