However, the credit score of a person does not always reflect the true status of his credit reputation. Some people get low credit scores not because they have unpaid bills or they incurred late payments but because they do not have enough credit transactions and credit history.
A good credit reputation is not earned overnight. A person has to work hard over a period of time to build up his credit score. If he is concerned about his credit rating then he should always check his credit report and make sure that all transactions reported there are valid. If there is a dispute on certain transactions then he should immediately call it to the attention of the company concerned and have the changes reflected on the credit report.
A person who wants to have a good and reliable credit report should be mindful of his credit report status. He should keep a record of what and how much he owes and pay all bills on time. A person should never incur a debt if he is not sure how the debt can be repaid on time.
While the use of credit is an efficient and convenient way of making purchases, every person who uses credit cards should keep credit balances to a minimum. This means that generally you should pay off the balances in full every month. Only spend on items that are necessary. Never splurge on things that are unimportant and unnecessary. This is not always easy to do when you are offered attractive deals every day in our consumer oriented economy. However, you must have discipline if you expect to build up a good credit score.
You must have a good credit score built up in advance before applying for a home mortgage. Remember that a home mortgage for bad credit people is a thing of the past, probably for a very long time to come.
In building your credit report do not give in to the temptation of using another credit line to pay a previous debt because it will only pile up debts and will instead be reflected as a negative mark on the credit report.
