How to Keep a Good Credit History

Posted by Peter Brady on Thu 19th October 2006 at 06:00 AM, Filed in Credit Tips

Every time you spend on your credit card, that action is logged and stored as part of your personal financial history.

If you pay your credit card bill on time or not, that is also stored and fed into your credit history.

Why is it worth keeping that history clean?

1.  The ability to buy expensive items, like a home or new car.

2.  An option to draw additional funds when needed.

3.  Allows the option to fund unexpected expenses.

4.  A poor credit history doesn’t only affect your ability to acquire credit cards, it affects many other things too, like getting a mortgage or hiring car.

What’s the best way to keep a good credit history?

1.  Keep to a budget.

2.  Set up a direct debit to pay off your credit card balance each month or set a reminder to pay off the debt before the expiry of the interest free period.

3.  Put away a little money each month into a savings account.         

4.  Consolidate credit card balances into one cheaper form of credit.

5.  If you own a home, consider taking out a home equity loan to pay off the balances on your credit cards.

6.  Make sure you have sufficient funds to cover checks. A bounced check will impact on your credit score.

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