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Credit History - Why it is Important
An individual that has, or wants to have, a 'good credit rating' requires a credit history. Your credit history refers to your past history of borrowing money, repaying that money, your employment history, bill payment history, and other factors.
Your credit history is reflected by your credit score. There are three major credit reporting agencies in the US, and these are the sources from which creditors, employers, landlords, and other businesses access your credit scores and credit history. These documents are called credit reports.
A person who has never borrowed money has no credit history. Building a good credit history is extremely important for all individuals, as their credit history will impact their ability to borrow money, to secure housing, and to secure employment. In addition, one's credit history greatly impacts the cost of borrowing money. Those with a good credit history will pay less in interest and fees on money borrowed than those with a poor credit history or no history at all.
Another group of people often not thought about as having no credit history are many seniors, particularly women. The reason for this is that in many cases, a older woman's husband has taken care of the finances, debts, payments, and other related issues. If a woman finds herself widowed or divorced, she may also find that she has no credit history and no credit score.
There are methods that can be used to begin to build a credit history. Inquiries can be made at local grocery and department stores for charge cards or credit cards, as local businesses are often more willing to offer individuals credit than are major lending institutions.
Another effective way to begin building a credit history is to take out a secured credit card. This is a credit card that, in effect, acts much like a debit card. One pays in advance for the ability to use the card. For example, one could deposit $500 onto the card, then use that $500 over time. This allows you access to major credit cards, at no risk to the card issuer.
If you find yourself in the situation where you have no credit history to speak of, talk to a professional about how you can start to build your credit score. Your local bank is an excellent place to start. If they do not have counselors to help, they can likely direct you to local programs or people who can help.
Credit is important - good credit is especially important! Start building your credit history today with Credit Heaven's services.
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