I want to start by answering yes! Perhaps, you’ve already heard about credit history and how your Credit Bureau score is constructed.
However, let’s do a review…
Your credit history is all the credit operations you have performed, it contains information about the financial products you have in your name and how responsible you have been with your payments. All this information is reflected in your Credit Bureau report, with which financial institutions analyze how you are managing your debts and decide whether or not to grant you a new credit that you want to access. If you want to know your credit history, you can consult this video tutorial or download an app like qiip.
Does a credit card help you build history?
Yes, if you haven’t started building your history yet or have a low rating, hiring a credit card may be a good option. However, you should keep in mind that the amount of credit that will be accepted will not be very high, as this also depends on your history. Now, many financial institutions offer you credit cards designed precisely for people who are starting their credit life.
The recommendation that I can give you in this case is to request a departmental card, since they approve them easier and have a low credit.
What if you already have a credit card?
Try not to cancel your credit card to accumulate seniority with your bank and add points to your credit rating, because financial institutions value that you are a permanent customer. You don’t have to use it constantly, just keep it active for as long as you can.
Regardless of whether you are new to the world of credit cards or if you already have some, it is very important to give them good management so as not to end up over-indebted and unable to meet their payments. So, I share the following points:
1. There is no need to have more than two cards:
You can have a credit to cover large or expensive expenses and decide to pay it in parts or in full each month. In addition, you can complement it with one of the services that, yes or yes, you have to pay in full every month; because it is a way for banks to ensure that you are punctual. With this card you can cover the fixed expenses in the month of water and electricity, or purchases in super, for example.
2. Pay from the moment you cut the card:
Don’t wait until the last payday. Normally, this is usually between 10 and 20 days after the cut-off date of your card and if you forget to do it on the deadline, for example, you can negatively affect your Credit Bureau.
If you have two credit cards, make sure they have cut-off dates, that is, on different days so that they do not join you in the same payment.
3. Evaluate all your options
Before accepting a credit card, analyze different offers and compare their conditions. Please note:
- The interest rates they handle.
- If you are charged an annuity.
- The additional benefits you can access with: promotions, special discounts, insurance and so on.
4. Complement with other credits
If it is within your ability to pay, you can combine different credits and complement the one you have with your card with a payroll credit, for example. This will help you expand the financial products on your behalf. However, remember to keep in mind that it is enough for you to pay for them.
Now, what can you do if your history has already been negatively affected by your credit card handling?
- The most important thing is that you are aware of your expenses:analyze what made you start defaulting on your payments: Did you make purchases many months later? Were you compulsive when it came to spending?
- Start paying as soon as possible: make an adjustment of your expenses and start paying off your debts. If you have several credit cards, start paying the one with the highest debt, but without neglecting the minimum payments of the others.
- Stop using your credit card for a while, don’t increase your debt if you don’t have enough money to pay it off.
Definitely, the best option and the best advice (although it seems obvious) that I can give you to maintain a good credit history with the management of your credit card is that you are a responsible payer. I hope you have been served by these recommendations.