Tips to build your credit history


Good payment and credit habits can be the key to making some of your dreams a reality. Although credit can come in handy if the unexpected happens, it shouldn’t be your preferred way to pay for day-to-day expenses. If you don’t have the money to buy what you want or need, and you buy on credit, make sure you can pay your debt on time.

Living off credit—whether loans or credit cards—can end up really costing you. Being in debt can affect what you can afford to borrow when you want to make a big purchase, like a home. The best thing to do is to start developing good consumer habits now and to limit your use of credit.

Protect your credit history

You need to remember that all your past financial actions will influence your financial institution’s decision to extend you credit in the future. A seemingly unimportant decision today can have major repercussions on your ability to get a car loan or business start-up funds later. And many landlords nowadays do a credit check on potential tenants before signing a lease.

Your credit history tells the lender if you’re trustworthy. This history determines what’s known as your “credit score.” It’s based on information like whether you make your loan and credit card payments on time, and whether you’ve ever declared bankruptcy. A few missed payments could mean you’ll pay a higher interest rate on a loan or you’ll need a co-signer or, even worse, you won’t be able to get any credit at all.

Remember that it’s easier to build a good credit history from scratch that to have to repair a bad one.

Tips to keep your credit under control

Here’s how you can establish and maintain a good credit history:

  • Limit the number of credit cards you have and pay off the entire balance every month. Credit limits only have a positive impact on your credit rating if the balances are paid off in full, so there’s no benefit to asking for more than what you need.
  • Sign up for automatic transfers to a savings account to build an emergency fund.
  • Pay your bills (electricity, phone, cable, etc.) every month before the due date.
  • Only choose credit cards that meet your needs. Be wary of about special offers: some cards offer a lower interest rate for a limited time or even gifts, but the regular interest rate is quite high.
  • If you’re unable to make the payments on one or more of your loans, contact your financial institution before you miss a payment.

A budget helps you stay on top of your spending

A budget helps you manage your money efficiently and clearly focus on your needs and what you can afford. It helps you make the most of your money. By sticking to your budget, you can better manage your spending and even set some money aside! Use our personal balance sheet (PDF, 626 Ko) Opens in a new window to get an overview of your financial situation.

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