How history is made with credit card applications

It is always awkward when we feel like we are being evaluated. As adults we often don’t get to see the many records that are kept on us in the computer age. We know that they are out there, but until one of them directly affects out daily life, we don’t give much thought to it. There is one record, however, which we need to keep track of, and that is our credit report. It’s actually very easy to access this file and even influence what goes into it so that our credit report shows a good credit history. In order to do this, there are some things that we need to be aware of.

Why Credit Should Concern Us

Building a good credit history is incredibly important. People will use your credit history to assess you many times in your life. Shopping for the best credit card, a new home, a new car, the best deal on insurance, or even a new job? You search may well be affected by your credit history. This is largely influenced by what is listed in your credit report and by your overall credit score.

Potential lenders, employers and businesses may all be analyzing your credit history at some point. It is essential today to develop good credit habits. And the sooner you develop good credit habits, the sooner you will have the kind of good credit rating which will get you the opportunities and options that you want. This will lead you to the best deals on credit offers and much lower interest rates than a person with a less favorable credit history.

If you end up with bad credit habits, you will find yourself with a bad credit history and a low credit score. Mistakes as simple as late payments have an impact on your credit history, as does having an account turned over to a collection agency. Along with any judgments or bankruptcies, these things will all have a negative impact your credit score. Low credit scores scare off many credit providers. You will be left only with those lenders willing to extend credit at a high interest rate or with high fees. You will miss out on the best credit and credit card offers.

Good Credit Habits

How can you make certain that your credit history is on the right track? Here are six simple things you can do to establish the kind of credit history that you will want people to see.

• Ask for a copy of your credit report from the three national reporting bureaus: Equifax, Experian and TransUnion. If they don’t have a credit file on you yet, that means that you have plenty of time to create a file you’ll be proud of. If there is a file available, check the information carefully and make sure that it is correct. If you see any errors or inaccuracies, be sure to contact the bureau reporting the incorrect information immediately so they can take the action necessary to fix your file.

• Be certain to have a bank account with both a savings and checking account if possible. Make sure that you are responsible with these accounts and avoid bouncing any checks. Try to get overdraft protection on your account to help prevent this.

• Open utilities accounts, such as electric, gas and phone services in your name only when you will be paying them and pay all bills on time. If you move, be sure to close the accounts. Often, people have left open an account for a friend and found out later that their credit was hurt due to late or missing payments.

• Take advantage of any opportunities to create positive credit for yourself through small loans that you will be able to pay off on time. If you are attending college, take out an educational loan. Even if your parent or guardian is listed as the primary borrower, if you cosign then the loan will be reflected in your credit report as well.

• Apply for a credit card of some type. Whether it is unsecured, secured, pre-paid, co-signed, a retail charge card or a gas card doesn't matter. The point is to simply make sure that the reporting bureaus set up files and report that you have used some form of credit wisely. You want to have a credit card, but you should use it as little as possible until your learn to pay it off in full each month. Always pay your bill on time. If you find that you can’t pay the full amount due, be sure to make at least the minimum payment, but always try to pay as much as you can. This will help you to pay off the balance more quickly, save you money, and make you look more worthy of future credit when it’s time to make a big purchase such as a car or house.

• Always act responsibly when it comes to your credit. Remember that it is a reflection of you that will be looked at for the rest of your life. Your goal is to establish and keep a good credit history.

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