Having a good credit history is better than having none

Credit in itself is neither good nor bad. It is simply a tool. If we use it well, it can help us achieve certain things faster, but when used badly it can get us into a lot of trouble.

There are people who flee from credit because they have seen closely the problems that it has been able to generate. This is not good either, because sooner or later we may find ourselves having to ask for one and if we don’t have any history, it will be very difficult to get it. And if we do, it will not be in optimal conditions. Lending to someone with no history represents an additional risk for financial institutions, simply because they do not know us: they do not know if we are good payers, because there is no history.

I have always thought that it is important to have a credit card, even if we use it little: perhaps to house some basic services such as the telephone or streaming services that we can easily contemplate in our budget. If we are afraid of not knowing how to handle it well, let’s not use it for anything else and pay the full balance every month, so as not to generate interest. There are several that will not charge us an annual fee, so it will not represent any cost.

Why? Simply because it helps us to create a healthy credit history and this is reflected in credit information companies such as Buró de Crédito or Círculo de Crédito.

People think, incorrectly, that only people who do not pay are “newsletters” in these institutions. Nothing is further from reality. All of us who use a service that is contracted or paid on credit, we have our history. In some cases it is good, in others it is bad.

Even if we hate credit and want nothing to do with it, we may one day want or have to ask for one. Perhaps the time to buy a home will come and all that we have saved over several years will not be enough. If we go to the bank to apply for a mortgage, but we have no history, it is likely that we will be denied.

Each bank or financial institution has different credit granting policies. In some cases they only lend to people with a good record. Others have a more diverse target market, have lower requirements, but offer very expensive loans (high rates).

There are products in which the institutions make a very clear segmentation. They offer a prime rate to their best clients, with an impeccable track record, but they also lend to people who represent a higher risk to them, with higher interest rates.

What we have to understand is that every time we need to request any type of financing, the first thing the institutions ask us is our authorization to consult our history in a credit information society. That allows them to see not only how consistent and punctual we are in our payments. They can also see what other credits we have and how indebted we are. In this way they can determine if we have sufficient payment capacity to meet a new obligation.

Clients who have absolutely no credit history are always the biggest risk, because institutions know absolutely nothing about us. There is no precedent that can help you determine if we will be good payers or not. It is as if we do not exist.

Therefore, it is better to have a credit history that reflects that we are careful in the use of credit, that we do not like debts and that we prefer to pay all our commitments on time. That in the end will open doors for us if we ever need it.

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