Your financial plan can be perfect if you have a credit to rely on. But what if you don’t have any?
Credit history is not just some abstract record. This is a serious document that becomes the basis of your financial reputation, which affects your financial plan directly. Those who do not pay bills on time and go over the credit limit can have problems with potential lenders because the lenders want to deal with disciplined clients. People described above are not responsible enough in financial issues. Lenders prefer to avoid dealing with them.
There is direct connection between your actions and your development. If you do not act wisely and responsibly you will not look trustworthy. Your credit score will be low and lenders learn about it from credit report. It is very important to build a good reputation for further success.
The way you manage your finances is important when a bank takes decision after you submitted an application. Proper actions establish a good Credit history and affect the credit report that can be useful to you in the future. The higher the credit score, the better your chances to be approved for the loan. Even if you do not need cash at the moment, it does not mean that you will not face financial obstacles in some time. Let your good reputation work for you. It can become a part of your financial plan and you can use it to your advantage.
With perfect credit report you get more opportunities. You get a good credit card and can take out a loan from the bank easier. You can also acquire a good vehicle and accommodation. The level of your life becomes considerably higher.
As you understand, the benefits of having good reputation pay off with time. You should take this question under control as soon as possible and work over its improvement as a part of your financial plan.
How to manage your credit history successfully
There is no need to worry much over the mistakes made though your each step in financial sphere is carefully recorded and you did all wrong. There is always a chance to improve your credit report. All you need to do is to control this aspect and this will help to make the history of your records flawless.
If you want to improve credit, you need to be disciplined and well-organized. You should also have good spending habits and make purchases wisely. The following tips will help you to improve the credit score. Much work must be done to achieve it, but you should not give up ahead of time. Doing what is required from you can make you an ideal customer – this is the category of clients who get the best offers from potential lenders.
How to establish a credit history
Only people who borrowed loans have a Credit history. Those who never applied to the bank or lending institution do not have it. It takes time to make a good one. The person should just be responsible in financial matters for that.
This is what you should do to establish the credit:
Submit an application for a credit card
If you get a credit card from the bank or retail shop and then repay it in full, you will establish good reputation and history, as a result of that. You need to pay the bill on due date for that. It proves that you are very responsible in money management issues. Find out if the card issuer informs the credit reporting bureaus and sends all this data to them.
Discuss it with a bank
Sometimes when a client opens a checking or saving account and it is free of debt, the bank decides to give a credit card for him/her though the person does not have any Credit history yet.
You can decide to use a secured card
A secured card functions in the same way as a common credit card but it is not that hard to get it if you do not have credit score. The reason for it is clear: you back this credit card with your own money deposited to the account. When you forget to pay the bill, then this amount is deducted from your account to cover this dept. The bank does not take risk.
You should choose a card with low annual fee, without fees for application or any other action involved with processing or membership. The account with an interest for deposit can be probably the best option in this situation.
Your close people can be the co-signers to prove your credibility
One of the ways to establish credit is to apply to your close people for it. It can be your friend or relative who is ready to co-sign your application. These people agree to repay your debt in case you fail. When you are not able to repay, your co-signer promises to do it for you. It should be taken into consideration that your failure to reimburse the credit can badly affect the credit of your friend or relative so one should be very responsible to prevent this.
Pay attention to the fact that a credit card/secured card holder can establish good credit only if the issuer sends the data to the credit reporting bureau. Otherwise, all your efforts will be in vain.
The debit card holders do not establish the Credit history.
