Building a Good Credit History

If you hope to someday buy a home and get a mortgage, it’s important to have a good credit history because a mortgage provider will take this into consideration when deciding whether to lend you money.

Lenders will check credit reports gathered by credit rating agencies to see how well you managed your financial obligations in the past.

You can build a good credit history by following the tips below:

• Pay bills - hydro, phone, cable - on time - If you're the forgetful type, set up direct bill payments from your bank account. It's painless, and will help your credit rating.
• Get a credit card - The utmost in convenience, credit cards have become necessary for everything from booking a hotel to renting a movie.
• Pay your credit card bills on time - This will help you build a solid credit history and avoid high interest charges.
• Limit yourself to one or two cards - It makes record-keeping simpler, and it removes the temptation to abuse credit. Also, beware of retail credit cards, as their interest rates are typically higher than those charged by the major credit card companies or financial institutions.
• Don't draw cash advances on your cards - A personal line of credit is a much more cost-effective way to give yourself access to cash when you need it.
• Establish your own credit identity - In many families, credit is held in the name of one spouse. If the relationship ends, one spouse may be left without a credit identity, making it much more difficult to borrow when needed.

Making wise use of credit, combined with regular saving and investing, can be a powerful way to meet your financial goals.

Talk to a Cipher Ardent Advisor for financial solutions to help you achieve your goals and get into your very own first home.