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credit history
By JOE MAILLET 972 views

Things you should know to Maintain a good Credit History

The credit history is a complete record of a business or a person, and their history of discharging financial obligations on time. All of this information can be found in the credit report of a person or an entity.

Banks and other financing companies determine the credit score through all the above information and refrain from working with bad credit small business loans. A credit score is a 3-digit number that allows potential lenders to analyze the financial strength of the applicant. The credit history of any person provides the lenders with an opportunity to make a calculated guess whether the applicant will be able to pay back the entire loan amount and its interest within the agreed time.

Banks and Financial institutions must deal with all kinds of people every day. The credit history is a tool at their disposal that allows them to form a realistic opinion on whether they should approve the applicant’s loan or decline it.

The important elements of credit history are as follows:

  • The exact number, as well as the types of credit accounts, maintained at any given time.
  • The tenure of these accounts.
  • The amount that is owed in these accounts.
  • The amount of utilized credit
  • Punctuality in making repayments
  • How many credits inquiries have been made regarding the person/entity?

Despite all this, many entrepreneurs do not pay much heed to their credit history. Another group of people believes that if the credit history is damaged once, it will never get repaired again. This belief is wrong. There are many ways with which you can maintain a good credit history, and also fix it in case it gets impaired due to any reason.

Things you should know to Maintain a Good Credit History:

The first and foremost step for the maintenance of good credit history is to keep checking it regularly. When you check your credit score, you are able to grasp all the information presented within it, and also analyze the factors that are spoiling it. Once you are aware of all these elements, you can gauge their impact, and also come to understand how you can maintain your credit history if you keep all of them in control.

The following are some of the most important factors that will allow you to maintain a good credit history in the long run:

  1. Checking your Credit Report for Error

There are three bureaus that provide credit reports to clients. Obtain all three of them and review them in a thorough manner so that any mistakes, inaccuracies or errors could be pointed out immediately.

If there is any kind of mistake in your credit report, it can adversely affect your entire credit history. So, as a first step, you must verify all the accounts that are listed in your report. The report must not have a single account that does not belong to you.

There is a remote possibility of the bureau erroneously fetching the wrong data, and presenting it in your report as yours. If you find out any discrepancies, write a letter to the concerned bureau without losing any time. Also, send the evidence of your claim. Within the same letter, request them to rectify their mistake immediately.

Double-check your own information before writing to the bureau. Also, make sure that you have all the required admissible evidence backing your own claim. The bureau will review these documents, verify their authenticity, and will only make amendments when they are fully satisfied.

  1. Paying bills on time

The very first thing that a banker would look for in your credit report is whether you pay your bills on time or not. They will also look at your payment history, and decide in the light of this data whether they should approve your loan application or not. There is no way a bank official can make sure that you will repay the loan within the stipulated time along with the accrued interest. However, your credit history offers an opportunity to make a very informed guess regarding the same.

You can maintain this part of your credit report, and eventually your credit history by making sure that all your outstanding bills are paid on time. If you have obtained a loan from another bank, you should again make sure that if all the principal and interest payments are made within the agreed timelines before the expiry of their due dates.

If the bank official sees that you are late in making these payments, he will not consider you as a safe bet for loan disbursement.

One of the most trusted ways of managing your outstanding bills is to use reminders in your inbox and cell phone. You only need to input the payment due date once. Whether you need to make payments against your car lease, credit card or a business loan, simply put the required data, and you will get notifications right before the due dates. If there are any overdue payments outstanding on your part, try and pay them off so that you can be reverted back to the current status by your lender.

  1. Get Rid of your Debts

You must have heard about the phrase credit utilization ratio. This is a very important concept that is triggered when a person applies for a loan from a bank or a financial institution.

The official working at one of these institutions will add all the outstanding balances on your accounts shown in the credit report, and then divide it by the amount you are allowed to take a loan. This will show them your credit utilization ratio which lets them know the average credit being utilized every month.

This ratio is also very useful for you because it would let you know how you can keep within your limit at the start of each month. Paying off all the outstanding debt will increase your credit utilization ration and your chances of getting approval for your loan application.


The presence of negative information in your credit report impairs your credit history. Negative information could be of any type but generally, it is considered as something that shows that you have either a lot of debt on you, or you are a habitual late payer. Maintaining your credit history is an ongoing procedure. It is not something that you can accomplish in a day. If you are running a business, good credit history can prove to be an invaluable asset. It will open up doors to financial institutions, and prove extremely helpful when you are seeking cash injection in your business.

Joe Maillet

Joe Maillet is an avid reader and a writer by heart. He is an author, freelance writer and a contributor writer, who write articles and blogs for various leading online media publications and for CEO and entrepreneurs from across the world. He keeps himself updated with the latest marketing trends and always recognized in the industry for providing solutions to B2B and B2C businesses.