Credit according to the financial experts, is a contractual agreement in which a borrower receives something of value at a particular point of time and agrees to repay the lender at some later date.

Credit is believed to determine the borrowing capacity of an individual or company. Credit history is the record of someone or their organization’s financial dealings based on credit.

It is an account of their past borrowing and repaying. It also contains facts about late payments and bankruptcy, if there is any.

A credit reputation can also be used as an alternative to credit history. Credit history is generally maintained by credit bureaus set up in several countries.

When a customer interested in obtaining credit applies for credit from a bank, whether it is a nationalized bank or private bank, his personal inputs are forwarded to these credit bureaus.

From time to time these bureaus updates the status of the credit holdersí accounts, cross-checks their personal information, like their address or contact numbers and records even the change of names, if there is any.

All this detailed information is required to understand the applicant’s creditworthiness. Moreover, these records are maintained to keep track of the personís whereabouts and also to make sure that he pays his debts in the stipulated period as mentions in the credit related agreements.

Credits and associated financial dealings help in boosting a country’s financial growth. Credit history further helps to determine the annual percentage rate of a countryís financial dealings.

Although itís hard to keep your credit record clean, in todayís world it is almost mandatory.