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By: Danette Mckay
Your credit history score has so much influence on your future yet it is miss understood and ignored by so many Americans. Knowing a few simple facts and taking care to manage your credit history can save you a lot of money and open the doors to debt when in need.

Your credit history score as the name suggests is a measurement of how good or bad your credit history is. Also known as your FICO score your credit history quality is summarized as a single number that in essence represents how good of a borrower you are. The higher the score is the better the credit history. Your credit history score is not used on a daily basis and for that reason many people ignore it until the day they need it and find out it is low. A low credit history score can prevent you from getting a loan or can allow you to get an expensive loan at a high interest rate.

Your credit history is influenced by many factors. The most important part of the credit history is an evaluation of how much debt you have taken in your life and if you have paid that debt on a timely manner. You actually need to have taken some debt and paid its payments on time in order for your credit score to increase. In many ways this is the conundrum of the credit history. To have a high credit history you need to have debt but you can only get debt if you have high credit history.

The way to resolve the credit history conundrum is by taking what is known as secured debt. Secured debt is a debt for which the lender can have a lien on tangible asset. If you do not pay the debt on time the lender can take possession of the asset and liquidate it in order to pay off the debt. A common example of such debt is financing for a car or a house.

Another factor that influences your credit history score is the ratio between available debt to used debt. In other words how much money you currently owe in debt divided by how much money you are allowed to borrow through different credit lines. Credit lines are preapproved debts that you can decide you use at your own discretion. The simplest and most common form of credit line among consumers is a credit card. The credit card limit is the amount of preapproved credit and the current statement balance is how much debt you actually used.

Making simple daily decisions can influence your long term credit score. For example when deciding to buy a car if you know your credit score is not high it might be a good idea to get financing for a small portion of the car price. By doing that you would indeed have to pay some interest but you are taking an opportunity to get easy debt that will in the long run help your credit history score and in the future help you with getting lower interest rates on really big tag items like a house mortgage. Another important thing to remember is not to use all your credit card credit lines.

Danette Mckay writes more about this and other subjects. Check out credit history for more about this and other subject from Danette Mckay
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