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The Imperfection of Perfect Credit Behavior

Aug 17, 2007
In a way, it is possible for you to be too good with your credit. If you do so little with your credit that you completely lack a credit history, it can be hard to get a good rate when you really need credit, such as when purchasing a car or a house.

Even if you've had great credit in the past, you can undo it by not using your credit enough. The good as well as the bad fade away over time, and the companies that issue credit do prefer recent activity as an indicator to old activity.

It may go against the grain, but occasionally using your credit cards instead of cash, checks or debit cards can help. Just pay them off promptly so that you aren't having to pay high interest rates.

Even if you're trying to live a debt-free lifestyle, there are good reasons to keep a healthy credit card score. The simplest reason is that no one knows what their future holds. A loss of a job, a medical emergency not sufficiently covered by insurance, and suddenly you need credit desperately.

Lacking a credit score can do more than just cause you to pay higher interest should the time come that you do need credit. Insurance companies also are known to consider your credit score when setting your rates. They say there is a relationship between credit score and risky behavior, which justifies that check.

If you've gone from having problems, such as bankruptcy or paying bills late, to no credit activity at all, you really need to work on building the good side of your credit. Not using credit won't be seen as a positive; it will look more like you have been unable to get credit or that you are unable to cope with it.

It's one of the vagaries of the system that not needing credit is treated as a negative. The reason for not needing credit doesn't matter. Without a history, companies can only assume a potential for trouble.

Worse, few people can get by without ever needing credit. It doesn't matter how smoothly your life is going now, a day may come when your available finances don't meet your needs without using some form of credit, even if it's only so that you can make big purchases such as a car or a home. Make the effort to have something show up on your credit report so that credit issuers know you are reliable.
About the Author
Stphanie Foster runs http://www.findcreditonline.com/ as a resource about credit and credit cards. You might {a href="http://www.findcreditonline.com/credit-cards.php">find the right credit card for your needs at her website.
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