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You may not realize it now but having a credit history is very important. But what really is the importance of having a credit history? A good credit history that is? It could be very difficult applying for a credit card and get a loan approval if you haven't established your credit history yet. The question now is, how can you then establish a credit if not a lot is willing to give you one?
Your FICO score is what lenders initially look on. Your score determines whether you are a credit worthy or not but without a credit history there is no score for lenders to look on. But this should not stop you from pursuing on establishing your credit history because there many other factors that lender consider before finally giving you a credit for the very first time.
Here are the said factors that you should closely check on:
Your Bank account
When opening a checking account at a local bank, no credit score is needed and that having such account is not reported to the credit bureaus. But even so, account or bank history is seen by many lenders to be very essential factor in approving your credit card or loan application the first time.
Your Employment History
The employment history is another factor that lenders look on. A lender would like to have a picture of how long you are able to hold a permanent job; the longer you stay in a job, the better your chances are of getting approved.
Bills and Utilities under Your name
One can possibly sign up for several utilities in his name even without any credit history. Gas, water, telephone and cable bulls under your name is actually not a way to establish a credit score but can have some bearing if you are a first time borrower.
Your Residence History
The frequency of your moving from one place to another is one other factor lenders consider. Your residency history is as important as your employment history so try to stay in just one place longer as possibly as you can.
Now that you already know the things that lenders look on before they finally give you a credit, it is now time you start establishing it.
First, open and do your best to maintain a savings and or checking account. But how can this help you? When you have a bank account with a good standing, this gives the bank a good impression that you are good in managing your finances. When you have established a good relationship with your bank, you can also possibly get a credit card or loan from them.
One rule when you're establishing your credit; be very patient for there are no short cuts to this. It can take one month or even years in some cases before credit history is successfully established but at least it is worth all the wait. Have your credit history established and enjoy all the advantages from it.
