A good credit history can be considered as a base of a good financial life. A simple reason behind is that the better your credit history will be, the lower interest rate you will get on a loan. This can help save you a decent amount of money in the long run, especially on mortgages.
Apart from this, maintaining a good credit history can also assist you in getting a job as well as a lower insurance premium. This is because a plethora of employers and insurance companies consider your credit history to provide you a job and set the premium for your insurance. So, a better credit history offers good chances of landing a job while having the lowest insurance premium possible.
Without any further ado, here are the 3 tips for establishing a good credit history:
1. Using Time As An Advantage
When it comes to establishing a good credit history the primary factor is having a long credit history. Unfortunately, there isn’t anything you can do about this. The only thing you can do is maintain credit accounts for a long time period. As the time passes, you will notice an improvement in your credit score.
As you will have more years of credit history on your side, creditors will have more understanding of how much of a credit risk you are. This will make perfect sense when you actually think about it.
Upon meeting someone for the first time, you don’t have the smallest hint about them, which is why you do not fully trust them. But when you get to understand them in time and understand who they are as an individual, you are better able to decide if they can be trusted or not.
2. Paying On Time, Every Time
The second biggest one in line is to make every payment on time. It doesn’t matter what you do, the one thing that you don’t ever forget is to pay your bills on time. It doesn’t matter if you can only pay the minimum balance in a given month, simply pay that sum. Remember, this is seriously important.
Think about it like this. Back in college or high school, your grade gets affected more negatively by a zero or incomplete as compared to with a 30% on an exam. Well, the very same concept applies to paying your bills in a timely manner. Keep in mind that by paying the minimum amount, you are at least showing that you are paying on time.
There is one more point to be considered here. In case you have been making your payments on time but somehow missed a payment once, don’t let that late payment inflict a negative impact on your credit history. Contact the agency to explain the reason and ask them politely if they can give up the late fee.
In the majority of cases, they will agree on waiving the late fee and record your payment as being on time.
3. Staying Updated
So you are making every possible effort to pay your bills on time and being patient is working in your favor for maintaining your credit history. But actually, there is one additional thing you can carry out to ensure that your credit stays at its best. You need to keep yourself updated all the time. This means checking your credit reports on a regular basis.
Why do you need to do this? With the alarming increase in identity theft, it is vital to make sure you don’t get victimized. And if you do unluckily become one, the sooner you are able to identify it and start rectifying it, the easier it will be.
Overall, making efforts to have a dependable credit history will offer optimism in your life, both monetarily and personally. So you need to ensure that you take the time to maintain your credit score at the highest level possible.
Improving your credit score can prove to be helpful in fixing your financial history. It demands patience as well as discipline to repair your credit score.
Remember, it only takes a single mistake to bring your credit down to the ground, but the good news is that by following these tips, you can ensure that you hold a promising credit history.
For Millennials, besides maintaining your credit history, it is also important to recognize the credit facts before it’s too late.