NEW YORK CITY, NY / ACCESS Newswire / July 24, 2025 / Your credit score is a number between 300 and 850 that creditors use in approving loan and credit applications. There are several factors that go into calculating your FICO score, but one of the most important is your credit history. That is, your established history of making on-time payments on bills and loans.

If you want to get approved for a mortgage, car loan, or other types of credit, building credit history is extremely important. Your credit history may have a significant impact on your life, so there are several major benefits to building a strong one.

What is Credit History?

Put simply, your credit history is a record of your payments on bills and other types of credit. Collected on your credit report, your credit history details important information like:

• Your history of missed late and delinquent payments

• Your history of on-time payments

• Gaps in your credit history

• How many credit cards and loans currently stand in your name

• The amount of time credit accounts in your name have been open

Essentially, it's a record of how you've used credit in the past that potential lenders use to predict the likelihood that you will use credit responsibly in the future. It's an important record that contributes to your credit score and will impact your eligibility for the best interest rates, rewards, credit cards, and types of financing.

3 Benefits of Building Credit History

Your credit score may have a significant impact on many financial and life decisions, which is the greatest, over-arching reason why it's important to build a strong credit history. But there are several other key benefits of building credit history, too.

Better Loan Approval Rates

You have a much higher likelihood of getting approved for a mortgage, car loan, credit card or any other kind of personal financing if you have a strong credit history. In today's competitive housing market and with elevated inflation rates expected to remain stagnant in the future, financing is crucially important to meeting financial milestones like buying a car or a house. Lenders are more likely to approve borrowers with a better credit history.

Lower Interest Rates

In addition to increased approval odds, a strong credit history will likely give you a better chance of securing the lowest available interest rates. Whether you're looking for a personal loan to start a business or you can only afford your dream home if you qualify for a low mortgage rate, interest rates can make a major difference in what credit you can and can't afford. A lower interest rate could also save you significant money on credit card interest charges.

Better Credit Card Benefits

Many credit card issuers offer rewards and perks to customers for using their card. The cards with the best rewards and benefits, however, are typically reserved for applicants with the highest credit scores. By building a strong credit history, you could gain access to credits on dining and travel, airport lounges, statement credits and much more. Credit card issuers offer many lucrative benefits today, and you may miss out if you have a poor credit history.

How to Build a Credit History

Building credit is easier than you might think. Although building a high credit score takes time, patience and fiscal responsibility, establishing a strong credit history will help you reach your credit score goals.

Some best practices for building credit history include:

• Open a credit card in your name or become an authorized user on a trusted family member's account and make on-time payments.

• Pay your credit card statement balance and other bills on time and in full each month. (Autopay may be a good way to ensure you don't forget a payment deadline.)

• Utilize less than your fully approved credit amount to demonstrate responsible spending.

• Maintain a mix of credit cards and loans to indicate you know how to manage different kinds of debt.

• Avoid opening new credit accounts or loans unless you really need to, and

• Avoid closing credit card accounts, as this can impact your score.

• Monitor your credit report for inaccuracies or fraud.

• Talk to your landlord about reporting your rent payments to credit agencies.

Whether you're starting from scratch or working to rebuild your credit, these best practices will help you establish a stronger credit history. You might already be working towards a good credit history by simply paying your utility bill or credit card balance each month. By building credit history, you'll have better options when it comes to major financial decisions like buying a house, going back to school, or getting a car. The best time to start establishing good credit is now.

CONTACT:
Sonakshi Murze
Manager
sonakshi.murze@iquanti.com

SOURCE: iQuanti