Using Your Credit Card To Build Credit History

Let’s say you want to buy a house, but you need to get a mortgage to help pay for the house. However, you have no credit history to speak of, so how can you apply for the mortgage to get your dream home? The simple and convenient answer is using your credit card to build credit history.

Using your credit card to build credit history couldn’t be easier, provided that:

you use the credit card often enough:

strange as it may seem, credit card issuer do not like their members to only use the card periodically. Also, this can lead to a telephone call asking if you really made the purchase. Using your credit card often leaves a paper-trail and everyone is happy.

you make repayments on time:

Nothing is going to ruin your chances of getting your dream home faster than forgetting to make a payment on time. Even if it is just the minimum repayment you must make every payment you are required to make, otherwise your credit rating and credit history will be ruined. Also, not making payments on time is very costly! Moreover, every time you fail to make a repayment on time on your credit card, the card issuer will inform a credit rating agency who will then use this information to make sure your mortgage application never succeeds!

you don’t have too many cards:

iIf you have 2 credit cards then this is ideal – it shows you are credit worthy enough to be trusted by more than one lender, but at the same time you don’t have too many cards. Keep in mind that while having lots of cards may look good when you open your wallet, on paper it looks like you have a lot of people to repay. So using your credit card to build credit history means not destroying that by overloading on cards!

Your credit history and credit rating are essential to the wellbeing of your financial health. So if you want to ensure that you have a sound and successful credit history you must make sure you comply with all of the terms and conditions of your credit card agreement and that you make payment – preferably in full – on time. Doing this, it shouldn’t be long using your credit card to build credit history before you have a sufficiently good enough credit history to consider making a request for the mortgage on that dream home!