The fact is if you ever need to borrow money, get finance on an auto loan, sing up for a credit card or even buy a house, then having a decent credit history is invaluable.
Even if it isn’t great at this moment in time there are steps you can take to build a better history and improve your FICO score.
What you need to do first of all is to take stock of your own personal financial situation and ask this question?
Where am I going wrong?
Sometimes we can affect our credit history without even thinking about it by applying for all the offers coming through the mailbox. These might include offers on credit cards and other financial products from personal payday loans with bad credit to credit lines.
Each time we apply for these a footprint is left on our credit file, and of course, each time we are rejected then this affects the overall score. It’s the same when we’re invited to take out a store card – this is big business for the companies involved but can be bad news for the individual consumer.
The fact is you don’t need lots of credit cards or credit lines, and they don’t help your FICO SCORE especially if you’re a new citizen of the United States.
What shall I do first?
Make sure you check your credit report on a regular basis just to make sure everything is ok. The whole point of the Fair Credit Reporting Act is to guarantee you can see your own credit report free of charge every 12 months. There are three top companies and these are Experian, Equifax, and TransUnion. These will help you keep track of any changes and you can even see your FICO score going up bit by bit. It’s there to help you in the long term.
‘IF YOU SEE ANYTHING WRONG ON YOUR CREDIT REPORT OR YOU DON’T AGREE WITH SOME PERSONAL DETAIL CHANGES THIS SITE WILL ADVISE YOU WHAT TO DO NEXT’.
So how can I build and improve my history?
Well apart from ensuring your bills are paid on time take a look at any credit or store cards you may have. If you have too many then cut these down to just one or two.
Make payments to them on time and keep an eye on your own personal bank account making sure you manage it well. Only apply for a personal loan, credit union loan and any other loan if it’s absolutely necessary. Keep your financial commitments in terms of credit down to the minimum.
If you have to take out more credit make sure you can meet the payments and on time. Don’t apply for every offer coming through the mailbox and don’t be tempted by lots of store cards or credit lines. Do all of this and you’ll find keeping a good credit score will become second nature.
What if I don’t have a credit history?
This affects many people of course and you’ll need to build a history of credit at a steady pace over time. If you are new to the country and on an H1B visa, then you’ll need to open a checking account with a top bank like ‘The Bank of America’, for example. They can issue you with a secure credit card whereby you give them a sum of money upfront which is put onto the card itself. Always pay this on time each month and you’ll soon be able to get an increase in the limit. By doing this you are slowly building good credit. Ideally you need to give things two years and be careful not to overburden yourself financially.
Remember don’t despair as building or even re-building your credit history is always possible. Start today for a better financial future!