What is a Credit Record and what information does it contain?
First and foremost it is beneficial to gain a clear understanding of what a credit record is before going into how to clear bad credit record. In order to do that it is important to know what a credit history is. A credit history shows how an individual has handled their loans in the past. These loans may range anywhere from installments and credit card loan payments up to house loans and the like. As a result, the credit history adds or reduces points from the credit record depending on whether the loans were repaid or not as well as regular and late repayments. Moreover a credit record contains the individual's credit history from various sources such as credit history with the credit card company, credit history with companies where installments were taken and previous loan repayments.
Why and Where Credit records are used
Now that we know what is behind a credit record let us take a look into why it is used and where it is used as well. The credit record for a person typically starts when they reach the ‘legal age’ of their country. A good credit record is of utmost importance in order to facilitate an easy and peaceful life. For instance, when renting a home the landlord will typically always check the credit record of the potential tenant in order to be assured of their ability to pay the rent in a timely manner. Other than these when applying for mortgage loans, in order to meet the lenders requirements a good credit record is absolutely necessary. This is why it is always important to start out with maintaining good credit scores.
How to Maintain a Good Credit record
This can be achieved by making sure to repay all loans on time, such as the credit card bills and any other loans. Furthermore, paying rent and other installments on time will also add to a good credit score. But it is worth noting that even a single late payment will be seen by lenders when checking the credit record while overpayments are not really taken into account. Moreover, despite maintaining a good credit history, a credit card theft, forgetful late payment of loans, credit card scams or even the misuse of a credit card by family members will result in a bad credit record, therefore it is important to know how to clear bad credit record.
There are multiple reasons behind an individual ending up with a bad credit record as established above but that does not necessarily mean that all is lost. It is possible if one knows how to clear bad credit record by taking a couple of instant actions, such as catching up on the payments and making sure to never miss future payments. Other than this, cleared debts and such are typically removed from the record within a few years.
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