Keeping good credit with banks is important, more so if a person want the loans to be approved quickly and in full.

Is it accurate to say that the record might affect the person’s chance of getting a loan or credit facility in the future?

Many factors come into play in the financial institution’s final decision to grant or deny credit to consumers and the individual’s history is one of the tools used by lenders to assess the credit worthiness. Defaults can hurt the credit worthiness and affect the chances of obtaining credit as most lenders will check the credit file to assess the credit worthiness prior to making a decision. A good credit repayment history will thus make it easier to obtain credit and to qualify for loans. By reviewing the credit report regularly, it allows a person to be aware of any information that is uploaded in the credit file.
Consumers also encouraged obtaining a copy of their personal credit report so that they can better understand the type of information that banks and financial institutions view when they retrieve their credit file.

While different credit providers use different methods for credit assessment, here are some factors which lenders look at when assessing credit applications:

    How affordable is the loan for the applicant given his income and expenses?

    What assets does the applicant own?

    How does the consumer manage debt? What are his payment patterns?

    How many loans and other credit facilities does the individual have? What is the current total debt?

    Does he have a record of bankruptcy proceedings, litigation or payment defaults?


Enhancing Credit Reputation

Payment Conduct – Payment history is a very important factor in determining the credit score. Since recent history carries more weight than what happened five years ago, getting in the habit of making on time payments is an incredible powerful way to improve the credit rating.

Number of credit facilities owned – Avoid multiple sources of credit. It is more manageable to keep track of 2 credit cards than 10.

Outstanding Account Balances – Lenders like to see plenty of breathing room between the amount of debt reported on the credit cards and the total credit limits. The more debts been paid of, the wider that gap and better credit rating.

Record of bankruptcy proceedings – Bankruptcy is the most catastrophic impediment to the good credit reputation far worse than delinquencies, loans or collections. Its impact, however, is dependent on how many defaults made on the credit before been filed.

Generally, an individual can take the following steps to maintain / improve their credit reputation with banks:

- Pay the bills on time and preferably in full where possible

- Pay down his debts and consider charging less

- Limit the number of credit cards he / she owns

- Cancel any unused cards

- Not applying for lots of credit at once

- Stay out of bankruptcy

- Get the credit report

- Seek credit caunseling