Posted on April 29, 2009 - by admin

Helpful Hints on Maintaining Good Credit History

Your credit history begins the moment you open your very first credit card.  Just like your personal reputation, it takes work and effort to maintain a good credit history so you can be eligible for that very important loan, get a job or making sure you finish college.  It’s also easy to ruin your credit history by overspending and getting snowed under by a mountain of bad debts.

Building your credit history is like building your house – you want to set a good foundation in place so that when you get around to putting the walls, the roof and the fixtures, you’re not going to get blown down by bad financial decisions and a lack of self-discipline.  Build a good credit history by using some very common sense tips:

Borrow Only What You Can Afford to Pay Back. If you lend money to a friend and he always pays it back and never waits for you to remind him of his debt to you, you know that he can be trusted (and you guys still have a beautiful friendship).  Credit card companies think along similar lines.  If you show that you are a responsible borrower, you can easily be granted the loans that you need and get new credit.  A bigger credit limit is not an excuse for you to max out your card. Stay below 30%-50% of your given credit limit and keep your balances in a reasonable order.

Be On Time When You Pay Bills and Pay Them in Full. Missing out on a due date is a huge no-no.  Avoid wasting money on late fees and interest rates by paying your balance in full every time.  Keeping a handle on your billing due dates helps you maintain your budget and make sure that you’re able to set aside your precious cash for other needs.

Save Money for Emergencies. It’s always a good idea to have cash that you can get your hands on in case you’re suddenly strapped for money.  Set aside some money for that eventual emergency every payday or put away some money coming in from extra income such as that new part time job, incentives or bonuses.

Pay More then the Minimum Amount Due. Sometimes, you really can’t pay off the amount in full and you need to make the minimum payment only.  Shorten the time you have to pay off the debt and save yourself from paying too much in interest rates by simply paying more than the minimum payment due each time until you’re through with the debt.

Use Your Credit Card Wisely. Don’t accumulate a whole stack of credit cards, just to take advantage of that reward or rebate.  It’s better to have at least just one or two credit cards that you keep in good order and use wisely, than accumulate several more and owe outstanding debts on all of them.

Use Cash When Possible. While cash can be lost and there are a lot of conveniences that come from using credit cards, it’s still good to use cash for easily consumable and cheap items.  It helps you keep track of your spending and the amount of money you actually have, rather than relying on credit to carry you through and make you spend more than you should.

The bottom line for creating a good credit history is responsibility, self-control and discipline.  The money you make is something you worked hard for – you deserve to use it in a way that frees you from worries and help you enjoy your life by simply making sure you manage your finances wisely.