How to Build Good Credit Card History
It is vital to have a good credit history
of borrowing money. If you never used a credit before, it might be a bit tricky to apply for a credit card
. There is no record on the basis of which to determine whether it is risky to lend you money. Most likely, you have to apply to a minor issuer of credit cards, for example, a store. Alternatively, you can apply for a car loan. Once this is done, it is very important to repay the credit on time.
A good credit history is established when your invoices are paid timely and in full. A single payment
is not an evidence of your payment capacity; so the lender will want to see more. If you make regular payments, even over a short period of time such as three months, you will find out that there are other lenders who are willing to give you credit, based on the credit history
you have built so far.
If it does not seem acceptable to apply for a hire purchase loan or a store card, you can decide to try the secured credit card
. It requires that you to have a limit on your credit card which represents a percentage of your account balance. The point here is the following: it is up to the issuer to decide if you are capable of repaying the credit.
Any credit card application
you submit will be decided on the basis of your credit rating. You may decide to submit an application to a credit rating agency. This will ensure that your credit card history is built efficiently. If there is evidence to think that the report is generated in a wrong manner, think of the possible reasons and try to sort with the agency the possible errors in your history. This is a must before the actual application for a credit card.
It is generally better to have an old and active credit history. If you have old cards, which are not used for a certain period of time, put them into work. If you use your old card from time to time, making small purchases, and you pay the full amount before the due date, your credit history will be positively influenced. The card should not be used only for emergency purposes but whenever you have the chance. This is a tactic to increase your credit limit
Remember that your credit rating
will be badly damaged if you have overdue payments, so always make payments on time. However sometimes, one late payment
cannot be avoided. If you have been a good customer, request a “goodwill adjustment”. It will eliminate problems with your credit rating. Start paying on time. If you make consecutive monthly payments in due time, your creditor may adjust the account, erasing the poor records.
Try to make more than the minimum payment required for your credit. It will signal to the bank that you feel comfortable with repayment amounts above the current minimum. This proves you will be able to cope with the new minimums, coming with the higher limit. Once this increase is a fact, spend the money wisely and budget with care.