Your Credit History By FederatedCreditCards.Com Copyright © 2008

With the advancement of technology we have today it's very easy for lenders to access someone's credit score and know exactly how risky it is to loan them money. Credit or FICO score is a formula lenders use to judge whether someone is credit worthy. Credit history is one of the key factors used to compute credit score.

Your credit history can make or break your overall credit score. It accounts for approximately 35% of the credit score. Your credit history, e.g., credit-based accounts you have opened, have accounts been paid off, were payments made on time, missed or late payments, will normally stay on your record for seven years. Legal actions like bankruptcy may stay on your record for ten years.

As noted, your credit history is one of the factors lenders look at when deciding to grant you credit. Basically, the rules are pretty simple. A solid credit history will mean the best credit opportunities, --better loan opportunities, and better odds of finding a great mortgage plan. Bad credit will reduce the odds of getting a loan and may increase the odds for becoming prey to sub-prime mortgage lenders. Insufficient credit history, or no credit history, will cause many lenders to reject your application for credit, but may also increase the odds, --mainly for young people such as college students, for falling prey to credit card companies trying to recruit inexperienced borrowers to pay high fees.

The benefits of a solid credit history are many. The best way to achieve a good credit history is to pay your bills on time. This is especially important when dealing with lenders who report to the major credit agencies. It's equally important to make sure your credit report is accurate. Credit experts recommended you obtain a free copy of your credit report each year and dispute any incorrect information. Make no mistake, incorrect information does frequently find its way on to people's credit report.

Crossing borders

A person's credit history is not usually shared between countries. Many countries have strict privacy laws in place that govern this. Therefore someone moving to the USA from abroad will have to build a new credit history in the USA. Often time's new immigrants are not able to get loans or regular credit cards until they build a solid credit history.

Although it's difficult to get loans and regular credit cards with no credit history, there are things that people with no credit can do to start building their history. These include paying rent and utilities on time and applying for a secured credit card or a store credit card. These types of cards are easier to obtain than regular bank credit cards. If you choose to obtain one of these credit cards it's important the card issuer report regularly to the three main credit bureaus so your history is properly recorded. After that, just make your payments on time and you will eventually establish a solid credit history and lenders will want you as a customer.

Students

College students are special amongst the groups of people with no credit history. College students are heavily recruited by credit card companies hoping to develop future relationships and potentially lifetime customers. Many credit card issuers offer special student credit cards. These usually come with restrictions like a lower credit limit, but can be a great way to build credit history. As stated many times its really important the credit card bills be paid on time for the student to demonstrate he or she will be a good credit risk and to build a favorable credit history.