Credit history, credit score, credit report-- these words will greet you
sooner or later when you apply for a loan, mortgage, rent an apartment, apply
for a job, or last but not the least apply for a credit card. Efforts towards
building a good credit history should begin early, right from the student life.
Ironically most of the students are not aware what is needed to build a credit
history. In this article we look at three simple steps that can get you a
jumpstart towards good credit history.
1. A checking or savings account
Begin with opening a checking account in your name. This is the first step towards acquaintance with banking and financial institutions. The idea is to open a bank account as early as possible, keep it in good standing, and it should reflect financial stability. And yes, the bank account should be in your name. Don't open and close bank accounts too frequently as this is perceived wrongly by credit reporting agencies. If you open a savings account, the money deposited in it can be used for security purpose when you want a loan.
2. Start paying the bills with your name
You need a mobile right? Go ahead and get a connection in your name and pay the bills so that they build credibility to your name. The way you pay your bills matter the most. If you pay everything on time and in full, a good credit history is waiting for you. The converse is also true. If you start faltering on your bill payments it will reflect badly on your credit history and you will definitely face problems while getting good credit cards and loans on cheaper terms.
3. Get a credit card
Students get numerous offers for credit cards when they enter a college. Some of them get carried away and take a few, and then use them to pay for all kind of things, and end up in debt. This is definitely not advisable. Credit cards are essential to building a credit history but too many credit cards do not build credit history faster. The thing that matters most for credit reporting agencies is how well you are able to repay your debts. Remember any credit card money is a loan which has to be repaid. The less the loan the better it is for you. So, try to get one good credit card and start using it wisely.
These three steps though, look pretty simple can go a long way in building strong foundations to a good credit history that will help you all through your life.
Duran Mueller an expert author and credit card consultant, provides great American express credit card tips. Read more credit card articles at his credit card website.
