Why Your Credit History Matters

posted in: Blog, Financial Tips 0

child and parent, parent on the couch, bad grades, child report card

Do you remember your teacher saying “this will go on your permanent record”? Well, think of your credit history as just that. Your credit history is a permanent record that follows you forever, playing a huge role in many major financial situations throughout your life. While many people think that a credit score, which is based on your credit history, only matters when applying for a loan or credit card, we are here to tell you that it goes far beyond that. And putting the past behind you isn’t something that can be easily done when it comes to your credit history. Here’s what you need to know about your credit history and why it matters.


Your credit history is a record (a report card, if you will) of how you spend your money and a credit report keeps a record of that from a number of sources (banks, credit card companies, collection agencies, and governments). It shows how many credit cards and loans you have how much you owe and if you pay your bills on time.


Why do past credit cards and loans matter? Think of it this way – Would you want to lend money to someone who will pay you back on time? Or someone who is always late or never pays you back? Businesses want to know the same thing before they lend you money. They will look at your credit history to learn more about your past spending and then decide if they want to lend you money.


Not only does your credit history matter for loans and credit cards you apply for in the future, but for rates on insurance and with cell phone companies. Often, insurance companies will look at your credit history to determine what rates to provide you. Cell phone companies look at it when you go to buy a new phone if you have to pay for it monthly.

While you can’t erase history, you can make strides to building your credit history up. And the more you build, the higher your credit score. The higher your credit score is the better rates you can receive on loans and credit cards. Start by setting up automatic payments to ensure that you pay your bill on time, every time. For more tips, check out our blog for 5 Tips For Using Credit Wisely. If you would like to learn more about improving your credit score while staying within your budget, visit one of our branches today. Our Member Advisors are here to help!

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