Is A Good Credit Report Really That Important?

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​When we are young we don’t always consider that our actions might affect us negatively in the future.  One example of this is when it comes to buying a home for the first time and want to apply for a loan.  A lender will take a lot into consideration before approving your loan and usually refer to your credit report to get an idea of how financially responsible you are.  This report shows whether you have a good history of paying bills on time or if you are in debt etc.  So, its clear to see that maintaining as good of a credit report as possible is a good idea.  What are some ways to do this?

One way is by going through the credit cards you may have accumulated and get rid of any you no longer use.  Make sure you call the credit card company and have them cancel the account.  If a lender notices you have too much credit available to you, they may assume you are someone who easily puts themselves in economic danger which will not work in your favor when applying for a loan.  It is a good idea, however, to hold on to the credit cards you’ve had for a long time as this will show you have a longer history of credit.

Be careful to avoid late payments.  This can show up on your credit report and work against you.  If you find it difficult to remember to pay on time, set up an automatic payment plan that will cover at least the minimum amount due.  This way you avoid expensive late payment fees and work to maintain your credit report.

Every year you are entitled to request a free copy of your credit report.  Take advantage of this as you will be able to analyze the report yourself and, if need be, look for ways to improve it before applying for your loan.  You can also correct any errors that may show up on occasion.

Yes, its good to think of ways to maintain a good credit report which will help you manage your money better and increase your chance of being approved for a loan in the future.