Your credit history is basically a summary of your entire financial life up to this point. Until you started taking out credit, you didn’t have a credit history at all. Once you start this, though, you can easily create a bad history for yourself with just a few wrong moves. It’s like a game where bad moves take away more points than good moves add! Over time, though, your goal should be to build a good credit score, which is done by having a history of being financially responsible and using credit wisely and well.
If you don’t know anything about your credit history, now is the time to start learning. There are many reasons to learn more about your history of credit. Here are just a few reasons to look at your credit report sometime soon so that you can start learning more about your personal financial history.
For one thing, knowing your credit history can help you see where you’ve made mistake in the past. Maybe you took out too large of a car loan at some point and ended up with very high payments. Maybe you have a history of using credit cards poorly so that you have a high balance all the time. This is a terrible blow to your credit score, and it can keep you from getting loans you really need in the future.
Another thing that knowing your credit history can do is to help you take note of possible identity theft. If you know where you’ve been with your own credit, you can see when other people are trying to take out credit in your name or when they have already done it. Your best defense against identity theft is to catch problems as soon as they occur. This is why you need to know what your credit history is and to check your credit report often.
For these two reasons, you really need to know what your credit history is like. Knowing where you come from can help you set a new course for the future. If you’ve done well with credit in the past, you’ll be able to see what you should do to continue doing well in the future. If you haven’t done so well, you’ll be able to change your behaviors so that you can create a better financial future for yourself.