Credit history is a report containing various information on a person or entity’s history of taking out loans and repaying them. It also records delays in payment, defaults, and declarations of bankruptcy.
Credit bureaus receive information from banks regarding the credit history of both individuals and companies. As such, if an entity applies for a loan, the credit bureau should be able to access its records and determine if the loan request can be approved.
An entity’s creditworthiness is dependent on its ability and willingness to pay its debts. Timeliness of payments matter too. It is therefore important for borrowers to settle debt obligations on a regular basis.
Since the data in an individual or company’s credit history has a big impact on loan approvals, accuracy of information is also very important. Credit bureaus are responsible for ensuring that information is updated. A consumer has the right to submit a dispute on his credit history data. The credit bureau will then have to check and ensure that the issue is resolved.