How to Create a Good Credit History

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To create a good credit history, pay credit card bills in a timely fashion, avoid excess lines of credit, pay auto loans and mortgage payments on time, and develop a family budget. Create an emergency fund to help make loan payments on time with advice from a registered financial consultant in this free video on credit history.

Part of the Video Series: Money Management
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Video Transcript

This is Financial Advisor Patrick Munro talking about how to create a good credit history. Credit history is a very important document that exists for all individuals, and credit is an important component of American life. There are three credit bureaus; Experian, Trans Union, and Equifax. The best way, of course, when you're young, is to develop credit beginning with credit cards and pay those credit cards in a timely fashion, always on time, even ahead of time. Keep your credit card balances low and don't involved in excess lines of credit because that can definitely hurt you. Of course, you can also get involved in auto loans. Auto loans are important, and you want to also want to pay those auto loans on time. It is good to have a car that is paid for so that you don't have excess credit out there. As you move into mortgages and acquire your first home, make sure you pay your mortgage on time, never pay it late. It's important, also, to develop a family budget so that you pay yourself first, and develop an emergency fund to make sure you always pay your bills on time. This is Patrick Munro talking about how to create a good credit history.

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