{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/personal-loan\/what-is-credit-history\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/personal-loan\/what-is-credit-history\/","headline":"What Is Credit History?","name":"What Is Credit History?","description":"When you apply for a personal loan, there are many aspects of your credit health that the bank takes into consideration. One of the key elements of your credit health that will be in focus during the process is your credit history.  As the term suggests, it is a reflection of your past credit behaviour...","datePublished":"2024-12-17","dateModified":"2024-12-17","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/indusind_bank_pfx_team_indperformics-com\/#Person","name":"CONVONIX Antony","url":"https:\/\/www.indusind.com\/iblogs\/author\/indusind_bank_pfx_team_indperformics-com\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/7d15b864167d3868c12ffdda340cc1c9?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7d15b864167d3868c12ffdda340cc1c9?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/What-Is-Credit-History.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/What-Is-Credit-History.jpg","height":288,"width":764},"url":"https:\/\/www.indusind.com\/iblogs\/personal-loan\/what-is-credit-history\/","about":["Personal Loan"],"wordCount":1320,"keywords":["Personal loan"],"articleBody":"When you apply for a personal loan, there are many aspects of your credit health that the bank takes into consideration. One of the key elements of your credit health that will be in focus during the process is your credit history. As the term suggests, it is a reflection of your past credit behaviour and includes your previous borrowing and repayment conduct. The more you know about what credit history is and how it affects your present credit prospects, the better prepared you will be to have a smoother loan application process. With that in mind, let\u2019s dive into the details of credit history. Understanding Credit History in DetailThe term \u2018credit history\u2019 refers to all aspects of your previous credit behaviour. This can include your various credit accounts, due balances, missed or timely payments, defaults, and so on. You can also refer to it as your credit record. Most of your credit information is reflected in your credit report. The credit bureaus keep a record of your credit history and portray it in a methodical format in a document known as the \u2018credit report\u2019. Your credit history is also an important element in determining your credit score.When you apply for an instant personal loan, you authorise the lender to seek your credit history. They will also assess your creditworthiness. The state of your credit history affects your loan application, including the loan amount and the interest rate you are eligible for.Now that you know what credit history is, let\u2019s see how it affects your personal loan application process. Also Read: Instant Personal Loans: A Convenient Answer to Your Financial RequirementsEffects of Credit History on Personal Loan ApplicationWhen you apply for a personal loan, this is how your credit history will affect its application and post-sanction process:\u00b7 Loan Approval ChancesA positive credit history with timely payments and extended credit accounts increases your chances of loan approval. It shows that you repay your loans responsibly. Lenders are likely to approve loans for such low-risk individuals. Similarly, a bad credit history can negatively affect your loan application. \u00b7 Interest RatesCredit history also affects the interest rate offered on your personal loan. Individuals with a strong credit score often qualify for lower interest rates. On the other hand, those with poor credit may face higher rates because of the perceived risk.With knowledge of interest for your personal loan, you can use a personal loan EMI calculator. This tool will give you an estimate of the EMI, so you can budget for your loan accordingly. \u00b7 Loan AmountWhen you apply for a loan, you must have a specific amount in mind. However, the actual amount you will be eligible for depends to a large extent on your credit history. Banks are more willing to lend larger amounts to those who have previously shown responsible conduct with their credit. Now that you have understood what credit history is and its importance, let\u2019s see how you can build and maintain it. How to Build and Maintain Credit History?Having a good credit history is an indicator of responsible financial behaviour. Here are some ways you can get started:1. Timely PaymentsWhen you pay your credit card bills and personal loan EMIs on time, it contributes significantly to your credit history. Even missing one payment can have a negative impact. 2. Low Credit Utilisation RatioThis ratio refers to how much credit you use out of your available credit limit. So, if you have a credit card, it is advisable to not go overboard with its credit limit. Your credit utilisation ratio must be under 30% to ensure a stable credit record. 3. Limited Credit ApplicationsWith every credit application, you face a credit inquiry. Having too many credit inquiries within a short span can lead to a weaker credit record. 4. Stability and Length of Credit AccountsHaving a stable and long credit history shows that you can manage credit over an extended period. This results in banks considering you a low-risk applicant. For similar reasons, it is also advisable to not close credit accounts within a short span of time.\u00a0ConclusionYour past credit behaviour can have a strong impact on your future financial endeavours. Having a solid credit history can help you enjoy better interest rates and make you eligible for a larger loan amount. Hence, you must practise responsible credit behaviour to ensure a credit history that stands positively with banks.If you are looking for a reliable banking partner, consider applying for a Personal Loan with IndusInd Bank. We offer competitive interest rates and flexible repayment tenures so you can manage your loan repayment more effectively and build a stronger credit history. Apply now for a Personal Loan with IndusInd Bank! Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct\/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.Share This:"}