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Having a good credit history is essential if you intend to easily get loans, mortgages, and many other purchases and transactions that can only be made possible if you have a respectable credit history. In the business of building, maintaining or even reestablishing credit history, knowledge is power.
How good or bad a credit history is rated according to several factors. To be able therefore to build a good credit history, the consumer should know these factors, namely: payment history, marks of responsibility and stability, credit inquiries, debt control, unused credit cards, and many others. The conscientious consumer would be mindful of these factors as they are applied to him or herself. For instance, any unused credit card accounts that are reflected on your report will have an impact on your history, and so by checking you will be able to address the problem and clarify any other suspicious accounts. The best move regarding unused credit cards is to cancel them.
You should also request for a copy of your credit report from the three credit bureaus, namely Equifax, Experian and TransUnion. These three credit bureaus are mandated by law to provide consumers of at a free copy of their credit reports once every twelve months. The report should contain personal, identification and employment information. It would also contain inquiries of institutions, organizations, or people (e.g. employers) that have requested for your credit history for the past two years from the time of the most recent report you are requesting.
Public record information which indicates details such as bankruptcies, as well as your payment history is also shown on your credit report. Once you obtain your own credit reports, you must immediately scan it for any inconsistencies and anomalies. Should there be any such problem, you must immediately contact the credit bureau with the mistake and report it. You should also take this opportunity to be informed of your credit activities, and be warned of going over the limit of your balance.
Of course, you should pay your bills on time. Paying the balance in full is not required, although it may be better. The next best choice is to pay the minimum balance. Moreover, you should not go over your credit limit. For a time, it may seem that the credit company does not mind it, but constantly going over your limit will yield disastrous results and will reflect poorly on your credit history.
