A guide to helping build your credit history

If you want to get into a credit agreement at some point in your life, it is imperative to start building up a credit history as soon as you enter the working world. By doing this, you give yourself a greater chance of securing credit, be it for a house mortgage, vehicle finance, credit card application or even a mobile phone contract.

Debt, however, can become a very dangerous thing. You should never go and borrow money just for the sake of it because inevitably you will end up spending it on things you probably don’t need. You do, however, need to understand that building a strong credit history can help you in the long run.

How exactly do you go about it? Here are some tips to help you not only get credit in future but to then build up your credit history.

Become a registered voter

One of the first things a lender will do when assessing your credit worthiness is to check whether you are on the electoral roll or not. This helps them to confirm you are who you say you are. If you are not on the electoral roll, you will never receive credit.

Register for a specialist student account

If you are a student, there is little chance of you beginning to build a proper credit history. That does not mean that you cannot plan towards it properly and start making small steps to begin its foundations. Many banks offer special student accounts in which they allow you to borrow a small amount. Often this is through the use of an overdraft facility at 0% interest. Use the overdraft wisely and for student purposes only – no, not beer – making sure that you pay money back into the overdraft at every opportunity. This will stand in good stead later in life when you apply for credit for the first time.

Get a credit card

Credit cards are an excellent way to build up your credit history, but they can also be very dangerous, especially if you lack financial discipline. To apply for one, consider going to the bank that you currently have other products with. You also might find yourself a target of other banks offering credit cards aimed at people with little credit history. These have exorbitant interest rates, and while you are welcome to use them, do it only when necessary. When you do use your credit card, pay it off timeously and the full monthly amount requested on your statements. Never miss a payment date, as lenders will consider this when you apply for their products in future.


Use one address

Today, many people do not live in one area for long, especially those who rent. Changing your address often is never a good thing when it comes to trying to secure credit. For this reason, try to have a fixed address that you can use when applying for a loan product. Consider using your parents’ address, especially if they have lived there for some time, or even use a post office box.

These are just a few of the easy things you can do to help start building an active credit history.This will put you in good stead in later life when you need even bigger loans, for example, a mortgage for your dream house.