Your Financial Future: Start Building Your Credit Rating Now

November 17, 2012 at 9:00 AM Leave a comment

Your Financial Future: Start Building Your Credit Rating Now

We all hear about bad credit ratings and how restrictive it can be if you ever want to borrow money. So it’s not surprising that the current economic climate has made banks very wary about lending to people that have a history of not paying back their loans and it’s getting more and more difficult to borrow money.

No Credit History Might As Well Be a Bad One

But what happens if you don’t have a bad credit history, you simply haven’t got a credit history at all? If you have no credit rating, you’re likely to find it just as difficult to borrow money as someone that has a bad history! It all seems rather unfair. Why should you suffer just because you’ve never had to borrow money before? Well, yes, it is unfair, but you can see why a bank would be wary. How will they know that you are likely to repay the loan without any prior evidence?
Start Building Your Credit Early

The best thing to do is to start building your credit history early. Building up a good history of borrowing money and paying it back in full and on time is a great way to show the banks that you’re a good person to lend to. The earlier you start building up a history, the better your credit rating will be, and you shouldn’t have as much trouble securing something like a mortgage.

How Do You Do It?

It’s all well and good saying that you should build a credit history, but how should you actually go about it?

Be Tactical with a Credit Card

Most of us savers tend to stay away from credit cards like the plague, but they can certainly do some good if you use them sensibly.

  • Set a low limit on your credit card
  • Only use your credit card for regular purchases such as fuel or your weekly shop that you would usually use your debit card for
  • Be sure that you will always have enough funds to pay off your credit card at the end of the month
  • ALWAYS pay off your card in full every month!

Don’t Ruin a Good Opportunity

Before applying for any loan be it large banks loans or unsecured loans, it’s essential to know that you will be able to meet the regular payments and pay the loan back in full. If you apply and are approved for a loan, don’t waste this great opportunity to build your credit rating!

Be sure to pay every installment in full and on time. This will all go on your credit history, which will directly affect your chances of securing a mortgage in the future. Build your credit carefully. If you fail to pay attention you may damage your credit, which will ultimately require the need for quick credit score repair services. If you miss payments, you could have a black mark against your name for quite some time.

If you don’t have any credit history at all, the current economic climate certainly isn’t your friend; it’s made banks very reluctant to lend and even those with a great credit history are finding it difficult. It’s important that you have a good credit history behind you in life and now is the perfect time to start building it: what are you waiting for?

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