Learn To Build Credit History

How you build credit history affects your life, and your credit score is used more than you know it. Your credit history is basically a list of every kind of credit you've ever had or applied for. If you ever want to borrow money (car loan, mortgage, debt consolidation, college loan, business loan), you're going to need some kind of credit.

All the details of your credit history are documented in a credit report. It is important to establish a good credit history so you can better your chances of getting a loan. It's not too hard to build credit history, credit cards are very easy to get a hold of these days. Click here to learn more about how to get and manage credit cards.

You can start building up your credit history by getting a credit card and using it to make small purchases that you have the funds for to pay off the debt immediately. Buy things you need like new shoes or a backpack for school. Then pay it off the minute you get a chance.




The best way to show you how important it is to build credit history is to give you an example of two individuals:

Bob and Mike...

Bob started collecting credit cards in college. He had a card from each department store he visited, trying to rack up rewards, buying more than he could afford. He maxed out all his cards and had more bills than he knew what to do with.

He finally graduated from college, left school and got a job as an engineer for Unnamed Labs Inc. He was very satisfied making about $60,000 a year doing a job which he worked very hard at. He quickly decides to buy a new car and a new place with all his money, but he couldn't get a decent loan because he almost destroyed his credit while in college.

Now Bob is working harder than ever, trying to pay off his school loans, credit card bills, and his huge car loan payments. He works harder than the average consumer, but in about 2 years he'll fully be out of debt and happy again.

... Now lets take a look at Mike...

Mike works at a local restaurant in his neighborhood. He didn't graduate from college yet, in fact, he hasn't even finished two full years of school. He has one credit card though, which he pays off every month.

After a few months of working hard, Mike saved up a decent amount of money to put as a down payment on a car he's been looking at. The dealership checks out his credit, and approves him for an auto loan with very low monthly payments that he can afford.

By paying off his credit card bill every month, Mike built up a solid credit score which allowed him to get an affordable loan on the car he wanted. Not many people can say the same for themselves.

Some people get in so deep with debt that it becomes way too hard to fix. If you think you are having this type of debt problem, you may want to get help immediately. If you don't stop it early enough, it becomes harder and harder to build credit history.

Identity Theft has become an increasing problem among credit card holders. It occurs when someone gets enough information about you to make purchases in your name. 27.3 million Americans have been victims of identity theft during the past five years. It is the fastest growing crime in the United States.

If you want to build credit history, you will want to keep your name safe from identity theft. To avoid identity theft, you must be careful with all documents that have your name, social security number, bank account numbers, credit card numbers, drivers license numbers, phone numbers, etc.

This includes junk mail that comes to you from credit card institutions trying to sell you their card. Be very careful when throwing out this mail, because it can contain information that a thief can get their hands on and it will hurt your chances to build credit history well.


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