How to maintain a good credit history

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Credit Card Applications » Research » Guides » Building Credit History » How to maintain a good credit history

How to maintain a good credit history


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.

Maintaining a good credit history is the key to having a stable financial position in today`s world. A credit history is required for pretty much every financial move that you would make in daily life. Right from getting loans to getting approved for a credit card, you must and should have a credit history to your name.

A credit history is basically a record of all your financial transactions which is maintained by the credit bureaus. The record is based on a score that they maintain which directly depends on how well you have managed your finances. All your transactions will be reflected in this record and the credit bureau will provide the same to any institution which requests for it at a cost.

The trick to maintain a good credit history is to keep borrowing. Yes, this is very true although it may seem counterintuitive. You need to borrow in order to start leaving footprints of your financial transactions. But at the same time you will need to ensure that you pay back all that you borrowed in time and on time every time. This is the mantra for maintaining a solid credit history for the rest of your life.

Start by applying and opening several bank accounts. Two to three would be fine for starters. Later, if and when you start a business you can go for more accounts. And after being associated with a bank for a sufficient period of time, you can start applying for credit accounts. They will easily provide you credit cards if you have been depositing amounts at regular intervals in to your account and not going negative on the balance.

After getting a credit account, you must start making purchases on it. Only make necessary purchases like day to day expenditures at the start. Do not use the credit card like a necessity but use it as a convenience. Carrying a credit card around is much easier than going around carrying cash. Always borrow only less than thirty percent of your credit limit. This is important in order to maintain your image as a person who does not borrow compulsively. Also start paying off your debts at the end of the month diligently. Never open more than two or three credit accounts. This will complicate matters as you will not know which account you have spent on.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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