A good credit history plays a very key role in credit score. Since bad history not only destroy your credit score but it creates difficulty in getting loans. Nowadays credit history is maintained by the websites such as www.goodcredit.com, if you have enrolled to them. These websites not only look at your history but give you alert notification if you are doing something wrong. Before knowing how to get a good credit history, it is necessary to know its importance and where it plays its role.
So whenever any moneylender or elite finance company wants to give you loan or credit card, it will check your history of credit score. At least six months of the data has been analyzed. And on the basis of that observation you are considered eligible for any loan or credit card.
To get a good credit history you need to maintain your credit score above 700 every month. Why 700?
It is because of the given range of credit score based on FICO model. According to the model:
The range of credit score is between 300 and 850. The credit score above 700 is considered good.
The range between 300 and 579 is considered poor and person falling in this range is need to deposit money or pay some fees in advance to get the credit.
The range between 580 and 669 is considered as quite fair and the person can get loan from few borrowers.
The range between 670 and 739 is considered good and some real good opportunities are available for this.
The range between 740 and 799 is considered very good and person get the more than average deal in it.
The range between 800 and 850 is considered as exceptionally good, and people get the top money lender and very good credit.
This range is checked by every financial firms and websites like www.goodcredit.com.
Now question arises, on what parameters this range has come. So the parameters used to give this range are:
35% payment history- this helps to check whether the person is not bankrupt or liar o bankrupt.
30% debt burden- this helps to check whether the person is able to afford new credit returns or not.
15% length of credit history-this helps to know about the usage and timely return of money.
10% on credit searches- this helps to tell what kind of further loans a person is applied for.
By computing all these factors, final score is generated. This score is taken by bank and also saved in records of websites such as www.goodcredit.com.
So to get good credit history you need to follow the following steps every month (so that score do not get down):
Use the safe credit card
Close the card and account which is not in use
Pay the EMIs on time
Pay the credit card bills on time
Do not delay in any of your payments