A credit history can be viewed as financial character reference. A good credit history is necessary for an easy bank loan, good job, for leasing apartments, negotiating cell phone deals and better insurance rates. Easy as it sounds, credit history warrants great vigilance from the user as one small mistake can take years to correct. A good credit history will give you a good credit score which is a measuring scale for your credit worthiness.
As with everything in life, starting out in the right direction is the best way to ensure a good credit history. There are some cardinal rules that a first-time credit builder should adhere to: Open a checking and savings accounts in a reliable bank: As an initial step toward building a good credit history, checking and saving accounts will reflect your ability to pay for immediate bills and will also show that you are saving for the future.
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Understanding the basics: A good credit score needs one to the basic understanding of the system. There are some simple conventions to be adhered to when operating a credit card; bills should be paid on time, live within your means and be prudent while spending. Keeping in mind that a single missed payment can undo an entire good credit history and the long years it will take to make up for that lapse. To avoid maxing out your credit limit, always use less than 30% of your credit limit to be on the safer side and remember that you don't need a balance on your credit card to have a good credit score. Paying your bills on time is the hard way to keep it in shape.
Always check your credit report: There are many sites online which can give you free information regarding your credit report status, make use of these and be alert to your scores. With Identity theft being prevalent these days, awareness of one's credit report will help one be on guard against it. Getting multiple reports from multiple sites will also help.
Go through your credit reports carefully: Credit reports are not infallible, going through multiple reports and being attentive to small or big errors is essential. As a consumer, it also helpful to keep in mind that negative information, like late payments, delinquencies, liens etc should be dropped after seven years, while bankruptcy can stay on your report till 10 years. Once you locate errors, the agencies can be asked to investigate them, this can easily be done online too.
Inclusion of information: Adding more positive information can increase your reliability in the eyes of the lender. Positive information can include, having the same job, address for a longer period of time, which throws light on your stability. While it does not directly affect the credit score, it is pertinent information used by the lender to substantiate your existing credit score.
Building a Credit History - Learn the Basics Lowes Build
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