Make Good Credit History Your Powerful Financial Asset

Monday, May 9, 2011, 2:00 AM | Leave Comment

Let’s face it. We in the western world and to some degree in Japan cannot live without credit. We use it on a daily basis when we go shopping and charge the purchase to our closest companion, better known as credit card. If someone else can pay for it, all for the better. For at least three weeks we shun the thought that we will have to pay for it until we get our bill [wish we never did].

If seeing the bill opens our eyes and don’t repeat using the card ruthlessly, then we can live the rest of our financial lives better and without the stress. Otherwise we keep getting deeper and deeper in the quagmire of nasty and never-ending debt. Some folks think they rather die than live without the credit card. But financial death by suffocation is always extremely painful.

Mommie Dearest

The credit card has turned out to be our Mommie Dearest. She can be our biological mother with all the sweetness in the world when she treats us. At the same time, she can lose temper and the financial wrath that follows can devastate our entire life. The irony in this quagmire is that the more we use credit card services, the less we care about the financial status of our credit. We use credit card quite diligently but we get scared of the thought of having to look at our credit history.

We are all suckers for discounts

We watch and pay attention to those commercials that offer some discounts on merchandise we absolutely don’t need. We just pack our wallets and embark on shopping spree because we just watched a f*cking ad offering discounts. We are all suckers for discounts and so-called freebies. We are unable to think with our minds whether we need the merchandise or not. Most frequently, we think with our hearts. We make emotional decisions. We don’t want to pass up the opportunity of buying something on sale.

Benefits of a Good Credit Report

We are all so sucked in [in] the busy world of our everyday life that one of the most important – perhaps the most important – aspects of our finances is very often completely ignored. And that is to build a good-to-excellent credit history. Once so very often, at least once a year, we must request credit report of our financial well-being. It shows our gains and losses – the positive and the negatives – in our world of credit.

Here are some suggestions how and why you can make a good and solid credit history one of your most powerful financial assets.

A record of efficient credit use, showing care and thought for your future finances resulting in prompt payments, can enable you to qualify for credit when you need it. It may also enable you to get a lower interest rate on your borrowing.

There are three main non-government credit agencies that compile data on every aspect of our financial lives. It is important to make sure your credit report is accurate and up to date. FTC and other agencies recommend to use Annual Credit Report dot Com.

When you get your credit history report, you should examine it thoroughly. If you see an error, be sure to contact the credit agency in writing. Inform them of the error, and ask that it be corrected. If not corrected or if the negative information is legitimate, it generally remains in your credit report for seven years. Bankruptcies may remain for 10 years. However, if you have paid special attention to your finances and have genuinely tried to live a better financial life, then most lenders pay particular attention to your most recent couple of years of activity.

In a Nutshell
Get your credit report at least once a year. Be aware of your credit status. Make sure it is accurate. Work diligently to improve your credit characteristics. Understanding the importance of your report can help you ensure that you will have good credit when you need it.

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