You might know a little about it, although there is a lot of information on the internet, not all of it is true.
Here we bring you reliable information that will help you understand the importance of credit history for your future credit applications.
At SuperPromise, we always want to offer you financial education. Our goal is for you to be well-informed. Here we will explain all the most important aspects you need to know about credit history.
According to the definition, credit history is a document that shows how many loans a person has had and their behavior with each one.
According to CONDUSEF, if you want to have a good credit history, it is necessary not to fall into debt and, moreover, make sure to pay what you owe. That way, you won’t generate more interest.
A good credit history helps financial institutions decide whether to grant you credit or not. It is a good way to analyze if you are a reliable borrower.
It is important to keep in mind that not all the information you find on the internet is reliable. That’s why we are going to debunk some of the myths surrounding credit history:
This is not true. If you are granted a loan, you are already listed, regardless of whether you pay on time or not. Just by having the loan, you will appear in these Credit Bureau records.
This is also false. Even if you pay your credits on time, your name will be in the credit history. As mentioned before, this credit history helps financial institutions assess whether you are a good or bad payer.
This is not true. Although late payments are recorded for about five years, if you start paying on time afterward, over time, your credit history will become positive.
Appearing in credit history isn’t bad. In fact, it’s very important to have a good history so that financial institutions will grant you credit. With the following tips, you will start building your credit history:
Apply for a credit card and begin building your credit history
If it’s the institution where you have most of your financial products, like a savings account, they are more likely to grant it.
You can try applying at another financial institution, although your chances are lower, so don’t be surprised if your application is denied.
Follow these steps, and your name will likely appear in the credit history, and you won’t face any problems. But always remember: pay your debts within the deadline.
You can do this by requesting a credit report from the Credit Bureau. Follow these steps to get it:
There are many reasons why someone might have a bad credit history. Here are some statistics showing why Mexicans tend to have a poor credit history:
As you can see, there are various reasons for having a bad credit history. These negative marks can reduce your chances of getting future credit.
Someone with a good credit history will be well regarded by financial institutions. In other words, getting a credit will be easier for them. On the other hand, someone with a poor credit history will have many difficulties obtaining a loan.
A good credit history is important for the following reasons:
To ensure your credit history has a positive rating, it is necessary to improve your credit behavior by making all your payments on time. One way to ensure payment for services is to set up automatic payments with a card in your name.
Additionally, you need to pay the required monthly amount to avoid generating interest, rather than just making the minimum payment requested on your statement, as this will incur more interest and prolong the debt.
For example, using a credit card is a way to start building a good credit history. However, before doing so, identify your monthly income and do not spend more than 30% of your credit limit with your card
If you already have a credit card or a loan and have been irregular with your payments, which affects your credit behavior, do not despair; it is never too late to start improving your credit rating.
If you have a debt that has exceeded your ability to pay, apply for a personal loan that helps you settle it with better payment conditions, allowing you to find stability in your personal finances.
While no one can deny you the chance to apply for a mortgage, having a bad credit history may lead to unfavorable terms or even loan rejection. Maintaining an excellent credit record is crucial.
That is why it is very important that your credit behavior is always exemplary: pay all your debts on time to avoid problems in the future.
If you have fallen behind on payments and want to restore your good credit history, the best thing you can do is settle the debts you have. If you do not have enough money to pay them all, contact the lending institution that provided the financing to try to negotiate.
If you are current on all your payments, your credit history will be updated. However, you should keep in mind that it may take up to 10 days for the institution to inform you of the change in your score.
The performance of a loan is preserved for up to 72 months. That is, the only thing that changes is the qualification. That is why you should not stop making payments when it is due. This way you will avoid having a bad rating.
Credit history helps lenders make decisions about approving you for credit. It is a tool to know if you are a good payer. If you have a good credit history, you will have access to credit such as automotive or mortgage loans.
It means that the lender will decide whether or not you are eligible for a loan based on your credit history. If it's good, you'll have a better chance of getting a loan. If not, you will be less likely to get a loan.
If you pay all your debts on time and have never missed a loan due date or are not over-indebted or exceed your repayment capacity and you have a proven track record of good behavior with financial institutions, you will have a good credit history.
It can be done from the credit report that can be requested from Buró. The first one requested per year is free
The banking history is the same as the credit history: it shows how you behave with banks in relation to credit.
Credit status is your behavior with respect to loans and debt payments. It can be positive (if you always pay on time) or negative (if you suffer delays or accumulate debts).
We hope you are now clearer about what credit history is and how credit history works. If you have any questions about this topic or any other, you can write to us at cm@superpromise.mx. SuperPromise will be happy to help you, thank you very much for reading us!