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Credit history is very important for every citizen. Whether you want a new credit card, a personal loan or a vehicle loan, the first thing that you should possess is a decent credit history. Even more importantly credit history cannot be built overnight. It takes years to build a good credit history and have a high credit rating which is why even students are advised to use student credit cards to start building some credit. Since credit history includes all the records of a person, including payments made, past expenditure patterns, loans etc. one must be really careful and ensure that it is clean at all times. Here are a few things which should be kept out of your credit history at all points of time.
Whether it is your cell phone bills, electricity bills or credit card bills, it is advisable to be consistent in paying those bills absolutely on time. Every time you miss one of the bill payments not only do you have to pay the late fines, your credit history also takes a severe hit. The more the number of missed bill payments the worse it is for your credit history and even worse for your credit score which will go down This is because if you don't pay your debt, in the form of bills, on time, your creditworthiness starts to come under a doubt. Hence it is good to give first priority to the monthly bill payments before you use your income for other needs.
This is one thing that can spell disaster for your credit history. There are some people who often choose this path to get rid of most of their debts, especially when they are under a mountain of outstanding dues and stranded without the means to pay them off. However, bankruptcy is one thing that is hard to get rid off from your history. In fact, even credit bureaus which offer to provide your credit history to companies you have applied to for loans or credit cards often have the right to show bankruptcy for a longer period of time than the normal bill payment and other credit related records.
If you have a mortgage, missing monthly payments is not good for your credit history. Sometimes, people go underwater, and decide not to pay the mortgage payments going forward when the cost of the house is less than the mortgage amount left to be paid. However, this makes getting loans in the future very difficult.