7 Tips to Establish a Good Credit History

Bad Credit history is better than no credit history. A credit report reveals a person’s credit history and all other details about them, including their name, address, phone number, credit pattern, payment details, et al. In short, it reveals how financially responsible they are in their day-to-day lives.

Having a credit history is very important, as it is used not just for taking loans but also to get employment, credit cards, electricity connection, phone, and other necessities. The analysis of your credit history tells the lenders if you are a suitable candidate who should be extended the loan. Therefore, it is important to establish a credit history first. Some tips are given below to establish this credit history, so as to make things much easier.

Bank Account

Open a checking account and a savings account with a bank. But after opening the account, do not overdraw. Ensure that your checks do not bounce. Lenders and credit reporting agencies look at bank accounts to check how responsibly you can manage your finances.

Utilities

Get the bills for utilities, like telephone, electricity et al, in your name. Pay the bills on time and get your address changed, when you move.

Residence and Employment

Lenders check your residence and employment history, which reveals a lot about you. If you have been holding a steady job consistently with a reasonably good pay then you are considered a reliable candidate for approval of loans.

Similarly, if you have stayed in the same place for a long time then you create a good impression. But if your history shows that you have been changing jobs and residences very frequently then you are considered as a risk investment.

Store Cards

Try to get a store card, like for gas. But before approaching the gas company, establish that they file a report to at least one of the big three credit report bureaus. If they don’t, find any other store that reports to these agencies.

Credit Cards

Approach your bank to get a credit card. If you can get a secured credit card, there will be no risk of missing payments, as the card limit will only be what you have paid to the bank beforehand. It is one good way to establish good credit history.

Loans

If you have secured a loan and have been making regular payments then your credit history reflects a positive reputation.

Students

It is a little difficult for students to establish credit history for themselves. For this, they can take advantage of the many schemes that are advertised on the college campuses for credit cards etc. These go a long way in building their credit history.