/What is a credit history?
What is a credit history? 2018-04-21T13:58:06+00:00

What is a credit history?

Mortgage terms as well as your chance to qualify for a mortgage largely depends on your credit history. Find out what that is and where you can check it.

Credits history shows your financial commitments. It includes both, fulfilled obligations and those that are still active. Your credit history lists financial commitments as well as your ability to pay on time. Mortgages, consumer loans, quick loans, auto leasing, unpaid phone or internet bills, even unpaid parking tickets – all this is taken into consideration when deciding if you can qualify for a mortgage.

In everyday speech we use terms as positive or negative credit history. However, it is a score on a scale. There are several scales that can be used – FICO, VantageScore, CIP and other.

While lenders use the credit reports the most, you can access them too!

An extensive registry is maintained by Bank of Latvia. You can obtain your credit history in person or electronically (if you have an e-signature or e-ID card and a card reader). Your credit history can be obtained from private entities as well. One of them – Credit Information Bureau.

Twice per year you can access your credit history via manakreditvesture.lv free of charge

Credit Information Bureau uses CIP scores, where your credit history is evaluated in a range from 250 to 900.

  • If you don’t see a score at all, there can be a several reasons for that – you don’t have credit history yet, it’s too old or there is only data about Telco providers or utilities.
  • 250-573 and 574-640 are high and very high risks and most likely you won’t be able to qualify for a mortgage.
  • 641-676 is also considered risky. You might qualify for a mortgage; however, the interest rate and other conditions won’t be favorable.
  • 677-712 is a good credit score, it means you are financially responsible and make your payments on time.
  • An excellent credit score falls between 713-900. To get this score you need a lengthy history of financial commitments without late payments. If you have it, you will qualify for the more favorable loan terms and possibly a lower interest rate.

Credit history plays a huge role in a mortgage application. Lenders want to make sure you have  financial discipline. It is not uncommon for a borrower to discover that there are unpaid fines or long forgotten bills only after applying for a mortgage. Check your credit history regularly and borrow responsibly. It will make a difference in the future when you decide to buy your home.

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