How to Build a Good Credit History


Having a good credit report or history takes work but it is able to be done. If you have a bad credit history it is important that it be fixed. You can recover from a bad credit score but it is hard and it will take some time as you will need to avoid any consequences that could make your score worse.

Credit economy

Our economy is based on credit and that is why a good credit report is important. The majority of people take mortgages to finance homes, as well as cars with loan money. Many young people have loans that pay college tuition. And the majority of people use credit cards to make purchases.

Applying for credit

You need to apply for credit as it is not just given to you. When you apply for any credit the retailers or banks will look up your credit report to get your credit history. This is why credit reports are so important. Bad credit will often get your application refused and good credit will get it approved.

Credit Reports

A credit report is the record of all of your credit activities. It lists credit card accounts or loans that you already have with the balances and your history of payments on this credit. A credit report also shows if there has been a problem with unpaid bills. There are 3 major consumer credit reporting agencies. They will only show this information to these requestors:

  • Creditors considering you for credit of any type;
  • Employers who are considering you for employment, promotion, reassignment or retention;
  • Being considered for an insurance policy or renewing an existing policy;
  • Agencies of the government reviewing you for various types of licenses or benefits.

These reporting agencies also furnish these reports if required by federal jury or court-ordered subpoenas.

Improving your credit has benefits such as:

  • Lower interest rates on loans;
  • Approval when renting an apartment or a home;
  • Approval when you want to buy a large item such as a car or a house.

Here is something more that will help you maintain good credit:

  • Maintain balances on credit cards or loans under control and manageable;
  • Make all your monthly payments on time and this includes utilities, internet payments, cell phone bills as well as mortgage payments;
  • At least once a year check your credit report for any errors;
  • Don’t go over credit limits on credit cards;
  • Never apply for lots of credit in a very short time frame;
  • Don’t file for bankruptcy;
  • Don’t have any accounts turned over to a collection agency.

You should also know that very little credit can be just as bad as having bad credit. In order to avoid any surprises, you need to see your credit report to check the score as well as what is in the report. Any time you apply for credit, you will be able to get a copy of this report.

Reviewing this credit report could help in detecting any problems such as mistakes on the report, or detecting any identity theft where someone obtains credit in your name.

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