This article is provided and sponsored by:
ClearPoint Credit Counseling Solutions

Have you ever been turned down for a loan or an apartment lease and wondered why? It could be due to your credit history. Let’s face it–our credit says a lot about who we are. It is our financial report card, and can affect many aspects of our lives. Professional credit counselors at ClearPoint Credit Counseling Solutions agree that having a good credit history is imperative to leading a financially fit life.

What is credit?

Credit is defined as a contractual agreement between a lender and a borrower in which the borrower assumes something of value, and agrees to repay the lender on a future date.

How does it work?

When you apply for credit (say a loan or a credit card), the lender has to decide if you are a good candidate for receiving the loan. The lender’s decision is based heavily on your credit history. They have to assess the level of risk involved if they are to extend credit to you. If you have displayed a poor repayment history, it is less likely that you will be approved for the loan or a line of credit.

The lower your credit score, the higher your interest rate. Over the life of a mortgage or auto loan, higher interest rates will cost you thousands and thousands of dollars. If you plan to take out either of these types of loans or a new credit card, it would be wise to pull your credit reports to see where you stand and start making improvements now.

Who actually looks at your credit record?

You may be surprised to learn that it isn’t just credit card companies. In fact, employers, landlords, and insurance companies can also gain access to your credit record. They are interested in reviewing your past payment history and spending habits to determine if you are a responsible financial consumer. If you have demonstrated an inconsistent payment history in the past, then this is an indication that you may do the same in the future.


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