How to Start a Credit History
Credit history is very important to show the credit worthiness of an individual. That is why you should learn how to start a credit history.
Likewise, it is also your responsibility to build it as soon as you create your credit history.
In this modern world, almost everyone is using credit cards and other methods when purchasing and paying for services. This makes sense in creating credit history yet not all are aware about it. It is not enough just to have sufficient fund in the credit cards because it is necessary to create and maintain your credit history. There are several ways to follow in starting credit history.
Common Ways in Starting a Credit History
Opening a savings or checking account is the first step in starting a credit history. This one way of making yourself a good credit risk so that potential lender would allow you to make credit. Through the account activity, the lender will determine if you have the ability to handle the money responsibly. You should keep in mind that overdrawing and writing bad checks are negative indicators that would damage your credibility. Once you have opened your account proceed to apply for credit card. Paying your credit monthly will show that you can handle money properly and instill in your mind that you should pay your credit card bills diligently.
On the other hand, applying for credit card would require you to be of legal age and have regular income and existing bank account. However, these are not enough because you need to demonstrate and show them that you can be a good customer by maintaining a good credit history. You can also start your credit history by applying for small loan. In order to build positive credit history you should repay the loan the soonest possible time. In this way, you can earn good credit score. Once you have established good credit history and been responsible in paying your bills, credit card issuer can extend your credit line. Likewise, make sure to always have the copy of credit history so that you will know and monitor the credit activity.
Moreover, credit history also depends on the right choice of credit card provider. As much as possible before signing up with credit card provider you should think about other options. You should also plan how you will use the credit card. Keep in mind that the credit worthiness depends in your hands that is why as soon as you start using your credit card make sure to pay it within the grace period. Knowing all the basic facts in starting a credit history would help you a long way in establishing your credit rating. This is not only for credibility but also for being responsible in handling money.
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