BUSINESS AND FINANCE

Tips to Create or Recover Your Credit History

The credit history is an important function that each institution analyzes before granting a loan. Building and maintaining a good credit history is key to a financial future.

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LatinAmerican Post | Moises Campos

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Leer en español: Consejos para crear o recuperar tu historial crediticio

Citizens should be aware that payment credit history plays a significant role in determining your credit score. Keeping credit card accounts current can improve your credit health.

Steps to Rebuild or Create a Credit Past

The first thing you should know is that in order to reconstruct your credit history, you must make sure that your credit report does not contain errors. You must bear in mind that your credit score is based on this report, and it is managed by a specialist in this area.

In turn, the credit history indicates the payments that you have stopped making or the late payments of bills, such as credit cards and other associated services. These past due or delinquent payments result in lower credit scores.

Paying on time allows you to have a good credit past. One of the great benefits is that if you have trouble remembering to pay your bills on time, you can set up automatic deductions with your bank, and this will prevent late payments.

We recommend that you set reminders for payment due dates on your credit cards, this will help you have greater control. However, by not paying your bills, the issuer can keep the part of the deposit necessary to pay your debt.

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If it's just the opposite, and you don't have a lot of credit, a secured credit card can help you establish it. A good history on a credit card of this type is ideal for obtaining an unsecured credit card in the future.

Other Tips for Rebuilding Your Credit Past

Currently, there are many alternatives to rebuild a person's credit past. Having a longer history means a higher score. In the event that you do not use very often or do not even buy with this credit card, the recommendation is to use it to prevent the issuer from closing the account 

How Does the Credit Score Serve for Credit Approval?

Credit score features may vary depending on the country or bank you apply to. Typically, this score is measured by loans and how much is in total debt at the time you apply for another loan. However, the better the score, the greater the probability of payment compliance. Lenders like to see that you can handle multiple loans at once.

Credit Score Myths

It is false that the credit record measures whether the finances are healthy. This only measures whether loan payments have been made on time. You can have many debts, but as long as you continue to pay them, this score will be good and will remain.

Another myth, which will depend on the country, is that you have to pay someone to find out your credit score. In some countries, this information can be requested free of charge through the bank or the banking superintendency.

One of the things that you must be very clear about is that, by not having a credit record, the bank will never lend you money. In the event that you have never had a credit and do not have a card either, they will ask for more documentation that allows you to validate and demonstrate liquidity.

The credit record or score cannot be cleaned or deleted. This is the fastest way to fall for scams and lose money, because no bank allows this feature. In addition, this can be a crime in some countries, because private information of affiliated users is being accessed.

Recommendations to Maintain a Good Credit Record

One of the most successful tips to have a good credit record is to pay debts on time. These payments can be made automatically or through online banking with a reminder on your cell phone, so you don't forget.

Make good use of credit cards, that is, do not spend more than you can pay per month, according to your monthly income. Keep up-to-date payments on credit cards. Some banks offer automated payments to avoid low credit points.

Avoiding debt is not good for your credit history. It is recommended to use the credits for things that help increase income, such as education, or that help reduce expenses, such as buying a house and not paying rent.

Another recommendation to maintain a good credit record is that if you have many debts, and you cannot pay them all, avoid disappearing. You can approach the bank to find a joint solution. In many cases, the debt can be deferred and the repayment term increased.

Mechanism to Recover a Good Credit History

One way to recover the good status of the credit history is to request the restructuring of your credit in arrears from the bank. So that this can be erased from your debt history, in many cases it is increased, or new payment terms are added to clients.

By paying the overdue balances of your credit history, you can have a higher score, which allows you a greater possibility to apply for loans. However, this allows any institution from which you request a loan to know that you had a delay, but that you are already up-to-date with that situation and that you were able to cancel it in full.

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