Building credit requires the use of credit

Building a credit history is tough when a person can be denied access to credit because they do not have enough of it. If your credit rating is exceptional but you’ve been denied for a mortgage, for instance, it is most likely because you do not have enough active credit irons in the fire. Article resource – Understanding the down side of avoiding credit by MoneyBlogNewz.

Being too responsible can hurt too

Individuals who are super-responsible can never enjoy their own parties, and the same is true for customers who are monetarily super-responsible with their credit. Paying down student loans right out of the gate, avoiding excessive use of credit and generally living debt-free will save money in the long term, however some creditors do not view the credit-phobic kindly. There are some people that use credit, but have many choices to choose from. It can look bad to have credit inquiries too often though.

If you’re a serial credit card applicant or do not have a credit history, that is not always a good thing, claims Rod Griffin. Griffin is the Experian public education director. You will need to your creditors that you are able to manage several credit sources at one time, even mortgage lenders like it when this occurs.

Active credit necessary with paid off loans

Paying off loans early isn't a bad thing, in accordance with Griffin. Negative marks will stay on a FICO report for about seven years while good things stay for about 10 years. Some customers will pay off loans quickly. This makes some creditors less likely to lend. Some creditors will say no to a credit application just because there aren't three accounts open and active for about 24 months.

Do not use too many credit cards

It's a myth that college students who are just beginning to build credit should take on multiple charge cards. Used responsibly and in moderation, having one charge card or two is a fine path toward building credit.

Griffin states that this might change though. Credit bureau insiders see the new Charge card Act established under the Obama administration as a possible hindrance to young people's ability to build a credit history. The access that college students have is taken away. That means the opportunity students have to build credit is limited.

Using just cash can hurt credit

While you will not rack up revolving debt by living a cash-only lifestyle, you also won't build your credit. Make sure you’ve a credit account you pay on every month. If there is an emergency, look to installment loans or no credit check loans to help. While such goods do not traditionally report to the credit agencies – and hence don’t provide an opportunity to record optimistic marks on a credit score – they’ll enable you to keep away from building up excessive revolving debt on charge cards.

Information from

MSN

money.msn.com/credit-rating/raise-your-credit-score-to-740-weston.aspx

Yahoo

finance.yahoo.com/banking-budgeting/article/112152/dangers-of-avoiding-credit?mod=series-m-article-c

Understanding the Credit card Act

youtube.com/watch?v=UbIDOZz6CPw