Credit history tells everything about your borrowing behaviour. How many times you have borrowed a credit line, how much you have borrowed, have you paid them back on time, all such questions can be known looking at one’s credit history.
What is the Significance of Credit History?
For lenders, your credit report is the basis of approving your loan and deciding quantum to lend. The credit history is the part of your credit report where the lender can see the details of all your past loans. Default-free repayment of all the previous loans is a key factor that lenders would observe to make sure if you can easily repay your dues on time. Thus, you would get the loan depending on your credit history.
How Does Credit History Affect Your Personal Loan?
The approval of your personal loan and the sum to be approved, these two things are driven by your credit history. If you have taken a loan in the past, what was the amount you borrowed, have you paid it back on time, if there was a default in payment, what were the reasons for the default and if not was the loan renewed; the credit history reflects everything and helps the lender to understand if or not you should get a new loan. All the banks, NBFCs, and other lenders can get access to your credit history, and they can check it every time and anytime you go for a loan.
What Does Good Credit History, Bad Credit History, and No Credit History Mean?
Good credit history: A good credit history is where you have everything clear, related to all your past loans. It means all the loans you have borrowed in the past are paid back timely without any default or delay in EMIs. It is surely the indicator that you are a potential borrower, and the lender approves your loan easily. You may get instant loan approval, and a loan at a lower rate of interest because of your good credit history.
Bad credit history: Bad credit history is the exact opposite of good credit history. A bad credit history shows that you have not made timely repayment of your past loans. You may have to face high-interest rates, strict credit checks, bigger EMIs, and smaller tenure. These are a few disadvantages of having a bad credit history. Late approval or rejection or not giving the loan in full that you asked for, are the other consequences of bad credit history and will definitely affect your personal loan.
No credit history: No credit history means you have not taken a personal loan or any credit line ever. It is obviously observed when you apply for your first personal loan. Having no credit history might seem as if you have been financially sound always and never needed any credit help.
But it works otherwise when it comes to offering you a loan as the lender knows nothing about your credit history. With absolutely no credit history, approval is affected but you can still have the loan based on your income, employment, term of the profession you have been in, etc.
There are a few lenders that you can go with when you need a personal loan without any credit check as well. FlexSalary is one such lender where you can get approved for a loan with a not so perfect credit score. Just based on your salary and bank statement you can qualify for a personal loan with FlexSalary.
Whether good, bad, or no credit history at all, you can still have the loan with FlexSalary, and to be eligible for a loan, you need to have at least Rs. 8,000/month salary. Taking a loan from FlexSalary is the best because when you apply for credit, you will be approved with a line of credit from which you can spend money up to the maximum approved limit. The interest is charged only on the money that you use and not on the total amount that you have borrowed. So, apply now and get up to 2,00,000 within a few hours.