Maintaining Good Credit Essay

Maintaining good credit is equally important as establishing credit. With a good credit background, consumers have the ability to borrow funds at reasonably low interest rate without settling with lenders who place incredibly large interest on money. Learning how to establish and maintaining credit is a skill that everyone needs to take serious and perfect. To establish good credit, consumers should pay their bills on time, keep credit balances low and/or maintain the debt to income ratio, and periodically check for any discrepancies on credit report. To begin with, consumers should be responsible by paying their bills on time when they borrow money. The borrower agreed to pay the money back in a timely manner usually for the agreed interest rate. The lender is entrusting the consumer to fulfill their obligation. For example, before the lender exchanges a loan amount or provide credit to the borrower, a promissory agreement is usually signed by the borrower. This is a binding document stating you agree to the terms and conditions; therefore, it is the …show more content…
When I went to go get my first car, the dealership approve me for a car with no cosigner since I had my credit cards for a year but my interest rate was incredibly high at 12 percent. When I ask why my interest is so high they stated that my credit history is very new and that I need different types of credit such as personal loans or student loans, mortgage is good to have because it show you can pay any type of loan back regardless of what type it is. This is very helpful because the dealership also mention that a car loan is the hardest loan to obtain because if you default on the car, unlike a house it’s not stationary and can be hard to track down. So having multiples accounts and a few at a time will help show creditors that you are a reliable borrower and can be trusted with a