Your Bank Doesn't Rely On Your Credit Report

Recently, many people have found that their credit report is becoming less of an issue when applying for credit at a bank whom they have been with for a few years. In this article, we will show you why you should never underestimate the power of your banking history (or building a reputation with one bank in particular).

As a pre-empt to the article, we should note that we will be arguing for the case that your credit report is important, but ultimately not as important as your actions. Sure, credit reports give a fairly accurate reflection of your past financial habits - but they are quite bad at predicting your financial future. This is where your actual banking history does a better job.

Why Some Banks Ignore Your Credit Report

If you go to apply for a new credit card or loan with your existing bank - you'll soon find that they require a credit check to be performed prior to the approval of the application.

This often frightens people off - but the reality is that if you have good, average, or slightly bad credit, you have nothing to worry about. Why? Take a look at these reasons and see if you agree:

  • Your bank knows your financial history better than anyone else.
  • The bank can prove your income and can actually see it.
  • The bank is able to monitor your expenses and your current debt - credit ratio.

These are the reasons why some people find that even though they have admittedly bad credit, they are still able to take out new loans or lines of credit, without any additional protection to the bank.

Explaining Bad Credit Report Entries

Another thing that banks will often do is give you an opportunity to explore and explain the reasons why you have bad credit entries on your report. Consumer credit is certainly not a one sided equation - and there are often a number of factors which can influence reasoning for not paying off debts in the past.

Hence - the moral of the article here is that if you are thinking of applying for credit, but you already know that your credit report holds a few daunting facts about your past - go ahead and apply anyway. You might be surprised at the overall outcome.