Being a Conservative will Harm Your Credit Score

No, I’m not talking about your political persuasion. I’m talking about your spending habits and how they’ll affect your credit score.

If you’re very conservative, you’re very careful about how you spend – you may even pride yourself on waiting until you have the cash to make a major purchase. Thus, you have no credit cards, no car loan, and no account at the appliance or furniture store.

Unless you’ve inherited real estate or bring home a phenomenal income, it probably means you don’t own a home – and at some point in the future you will need to apply for credit.

You might walk into your local mortgage company office feeling pretty good about yourself and feeling confident that you’ll get the mortgage you want at the lowest possible interest rate – because you’re a responsible person and have no debt.

Nothing could be farther from the truth!

Strange as it may seem, lenders want you to have debt. They want to see that you have a history of paying bills on time, and if you have no bills, you have no history.

In the past, we were able to help people get mortgage loans by showing the lender all their receipts for rent, phone bills, power bills, etc. But in today’s “running scared” mortgage market, that might not work.

So what should you do? First, get your free credit report and see what your FICO scores actually are. It’s always best to know where you’re starting from if you intend to go somewhere.

Next, begin building your credit. You may have to begin with a secured credit card, but since you have no adverse history, you may be able to obtain a card with a low credit limit from a mainstream source.

Once you have the card, begin using it to make small purchase. Or use it for a few large purchases – such as gasoline! When the bill arrives, pay it in full and continue charging those purchases. In a few months this activity will show up on your credit report.

Then, get another card and do the same thing – but be careful not to exceed 30% of your available credit on any one card during any one payment period. The amount you owe is reported as the amount on your monthly statement, so use the statement, not the calendar, to determine how much you can spend in a given month.

After you have a few month’s history with your credit card, ask to have your limit increased. Not because you want to use it, but because your credit report will then show more available credit that you aren’t using.
Check your credit report again regularly – and have fun watching those FICO scores as they go up and up!

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Disclaimer: This information has been compiled and provided by as an informational service to the public. While our goal is to provide information that will help consumers to manage their credit and debt, this information should not be considered legal advice. Such advice must be specific to the various circumstances of each person's situation, and the general information provided on these pages should not be used as a substitute for the advice of competent legal counsel.