Essay Sample on Importance of Both Credit History and Credit Score

Paper Type:  Essay
Pages:  3
Wordcount:  610 Words
Date:  2022-12-12


It cannot be denied that good credit plays a significant role in our financial life. It should be noted that it is not only crucial for apparent things like loan qualification or maybe getting a credit card, but it can as well be used for other less common things like renting a car, getting other services and even perhaps qualifying for a job. Therefore, it is important to note that credit history is the record of the ability of a consumer to repay the debts as well as a demonstrated responsibility in doing so (Rist, 2016). The credit history may involve; amount owed, number of credit inquiries, amount of available credit that has been used, whether or not bills are settled in time among others. On the other hand, I would let the young family member understand that a credit score is a three-digit number that shows how one is likely to repay his or her debt. By making him aware of these two, he will know the term and how they are applied. This will make him be a responsible creditor having understood the rules behind credit history and credit score (Rist, 2016). This is the aim of this paper.

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To be able to build a positive credit history, I would advise him to avoid things that might hurt the credit. Things like late payments of the bills, too many credit card applications, as well as high credit card balances, should completely be avoided (Rist, 2016). Further, I would advise him not to be afraid to start small. He should expect to start from small and regulated loans as well as low credit limits. This is because as one becomes responsible by repaying the loans, more will be given.

It should be understood that, as earlier mentioned, credit scores are generally based on the responsiveness of the creditor. It depends on how often one makes payments appropriately on time as well as the number of accounts that one has in good standing. It does not, however, depend on personal details like religion, marital status, and gender among others (Rist, 2016).

For a person to improve their credit scores, he or she must ensure that credit card balances are kept low as it cannot be denied that high outstanding debts affect the credit score. Also, paying off the debts and not moving it around is another strategy to improve their credit scores.

It should be noted that there are several benefits of having a good credit score. These include factors like enjoying meager rates of interest on the credit cards as well as allowing one to save money on security deposits on nee utilities and even on insurance services. To maintain your credit score, it would be wise for one to settle his or her bill on time to avoid inconveniences (Rist, 2016). Also, another strategy to maintain a credit score is by keeping credit card balances low so that it remains within thirty percent of an individual's combined card limit. Finally, to support a credit score one should ensure that old credit cards are not closed as because if they are closed, the issuer will no longer send updates to various credit bureaus. Less weight will be put because of inactivity.


In conclusion, it is important to let one clearly understand the meaning and importance of both credit history and credit score. This will adequately prepare them for financial credit services so that they do flaunt the financial rules and regulations of various bureaus as well as impart a sense of financial responsibility on them.


Rist, C. (2016). History of Monetary and Credit Theory: From John Law to the Present Day. Routledge.

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Essay Sample on Importance of Both Credit History and Credit Score. (2022, Dec 12). Retrieved from

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