Talecia Bell

Establishing a credit history is essential to achieving financial freedom in the future.

But there are still those people out there who, for whatever reason, are without a credit history.

Claudia Buck, financial columnist for the Sacramento Bee, said not having credit typically means there is no credit history about you from the three major credit reporting bureaus: Equifax, Experian and TransUnion.

“It’s usually because you haven’t entered into any transactions like renting an apartment, obtaining a credit card, paying utility bills, et cetera,” Buck said. “Those are the kinds of transactions that help build a credit history.”

Today some of the most simplistic forms of billing accounts require a credit history.

When I first started living by myself, I had never had anything in my name prior to that. I wanted to get satellite television.

I contacted a cable company thinking I would automatically be set up for services; however, I was denied. I did not get the cable service because I did not have a credit history.

Lenders and service providers always look at your financial history to determine whether or not you will be able to repay future debt.

Sarah Thurston, junior business major, said she applied for a car loan when she was 19 years old, but was denied.

“I had no proof that I’m accountable,” she said. “It just made me feel immature.”

The more established record of on-time payments you have, the better your credit history.

But taking charge of your finances can be easier said than done. The trick to having a good credit history is keeping your spending simple and to a minimum because there are also pitfalls to establishing credit.

Opening too many accounts under unreasonable billing agreements can ruin a good credit history.

If you are only working between 20 to 30 hours a week at minimum wage and managing the cost of independent living, do not agree to that $2,500 line of credit your bank is offering you. In doing so, you are setting yourself up for failure. Realistically, you do not make enough income to support a line of credit that large.

Even though you do not have to pay back all of your credit debt at once, maxing out your credit card can become a problem.

Credit history may not be on the top of your list when you have a paper due Monday, a midterm on Wednesday, and you still need to find something to wear for your date on Friday.

But establishing a credit history is just as important as academics.

Get ahold of your financial future and avoid worrying later.

Talecia Bell can be reached at [email protected].