The term “Credit History” is used for a thorough examination by financial bodies to ensure if one can be trusted to avail any credit benefit based on their past records. Your credit history has several factors which determine whether or not you are credit worthy. The main factors that determine your credit history are;

Credit payment history

This check determines how well you have paid you credit, and if you owed any money in the shape of bills, personal loans or any other expenses which were collectively billed for any agreed outstanding periods. Monthly utility bills are a good example of “Credit Payment History”. If you did miss any bills in the past then it can be counted as a negative mark on your Credit Payment History.

The total period or the length of your credit history

Just the way you can put more trust in the people you have known for a long time and you know that they cannot deceive you or cheat you with your money, same is the case with any banks or financial institutions willing to trust people with longer a credit history. This is simply determined by the number of years you have been in a certain country, the number of years you have been with your bank and the durations you have spent on various addresses.

If you have any outstanding debts

They will also try to find out if you have any debts to pay which can harm your ability to payback. The total amount you owe and the total duration you are expected to pay it off can largely effect your credit history.

In case of a bad credit history

If you have incurred any bad credit incidents such as bankruptcy, penalty charges or have faced any debt collection incidents. This can seriously harm your credit score and worst if such incidents have occurred frequently in the past.

Total income Vs Total expenditure

This helps them determine how much you are able to earn on a regular basis or if you have any savings or funds available to you compared to your regular monthly outgoings. If you have a reasonable income and savings ratio then this can be counted as a huge advantage to let the creditors know you have the capacity to payback the new credit they are about to lend.