Why Is it Important to Build a Credit History?
When you build your credit history, you establish a record of financial trustworthiness. As a good credit risk, you'll be approved for credit cards or bank loans, you'll be a strong job candidate and you'll be able to pursue goals like buying a home.
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Getting Loans
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With a good credit history, you look more attractive to potential creditors, and they will be more willing to offer you loans for your long-term goals. For example, when you have a history of paying your credit card bills on time, you're more likely to be approved for a mortgage.
Teaches Discipline
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Building a credit history teaches you to be disciplined in managing your finances wisely. If you know you have to make monthly student loan payments, for instance, you'll be less inclined to spend your check carelessly and you'll stick to a spending limit.
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Applying for a job
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When you apply for some jobs, the employer will check your credit history. A poor credit record will hurt your candidacy.
Financial Literacy
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When students open their first credit card account in college, they get valuable lessons in debt management. They'll learn credit terms such as available balance, interest rates and grace periods, and they'll also learn what happens when they miss payments.
Emergencies
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When unemployment, a death in the family, divorce or a natural disaster happens, having a good credit history is essential. You may need to use credit for temporary hotel stays, to get a new apartment, to buy groceries or to pay bills.
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