Explain How Your Payment History is Used as a Measure of Your Creditworthiness?
Your payment history shows if you pay your bills on time, and it helps lenders decide if they can trust you to repay money they might lend you.
by Sai V
Published Oct 25, 2023 | Updated Oct 25, 2023 | ๐ 1 min read
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Explain How Your Payment History is Used as a Measure of Your Creditworthiness?
Your payment history is a key metric in assessing your creditworthiness. It reveals your track record of meeting financial obligations and making payments on time. Timely payments indicate reliability to lenders, reducing the perceived risk of lending to you.
In contrast, delinquencies or defaults can lower your credit score and make you appear less creditworthy. Lenders rely on this history to determine whether to offer credit and on what terms, with a strong payment history increasing your chances of favorable loan terms and approvals.
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