How to build a positive credit history?

 

Let’s start by defining what a credit history is, because it is surely a term that you have heard many times, mainly if you are looking for a loan.

Credit history is one of the reports that risk centers manage to show how many loans we have or have had. This report shows the payment status of each of the active loans and the history of the previous loans, with the objective of knowing the financial behavior of a person when acquiring the obligation of a loan.

Financial and banking entities use credit history as a tool when evaluating a person’s loan application.

Why is it important to build a good credit history?

Why is it important to build a good credit history?

Having a good credit history will allow you to access various financial products, such as loans and credit cards. The better your history, it will be much easier for a financial institution to provide you with a loan.

On the other hand, there are entities where it is required to have a credit history in order to access their services, for example, mortgages.

Another advantage of having a positive credit history is that you can access loans with better conditions, such as lower interest rates, higher amounts, more flexible installments, etc.

But how do I build a good credit history?

But how do I build a good credit history?

Here are some recommendations that will allow you to build a positive credit history. Take note!

Pay your loans on time

Pay your loans on time

When you apply for a loan, comply with the payment of your installments on the agreed date, to avoid generating interest and being reported at the risk centers.

The financial institution that grants you the loan will give you a payment schedule. Review it well, organize your expenses and make sure you meet the payment dates of the schedule.

If you are late in a payment, catch up.

If for some reason you were late in paying a fee, this will be recorded. It is important that even when you are late, you continue paying the rest of the debt in a timely manner, to avoid a negative report.

If you do not have the money to cover all your debts, go to the institution that granted you the credit and tell them about your situation. Many institutions offer refinancing options.

Know your ability to pay

Before acquiring a financial commitment, it is important that you know your ability to pay. To do this, balance your income and your monthly fixed expenses. This will let you know if you have enough money to pay your credit fees. Also consider how long you should contemplate this commitment within your expenses.

Avoid overindebting you

Try not to acquire multiple debts at the same time and if you have credit cards, avoid overdrawing them. Remember that when acquiring a loan or credit card you must do so in a responsible manner, knowing the limits that your income allows.

Having a positive credit history will open the doors for you to access a wide variety of financial products with greater benefits and that best suit your needs.

If you still don’t have a credit history, applying for a loan can be a good alternative to start. You can apply for your loan online here.