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Omni Military Loans Blog:

Tips to build a positive credit history

By - Posted on July 1, 2019

Good credit sign

Estimated reading time: 2 minutes, 45 seconds

It happens. Someone goes to an auto dealership in the hopes of financing a car only to find out that they don’t qualify for the lowest interest rate. They have a sufficient down payment…so what was the problem?  The person’s credit score could be the culprit.

Historically, credit scores have been used by creditors primarily for situations like this, such as determining interest rates for car loans and mortgages. But today, credit scores can affect everything from your insurance premiums to your ability to rent an apartment.

Your credit score and credit history

Your credit score is determined by the credit bureaus Equifax, Experian and TransUnion and is a numerical rating of how well you use credit. It’s based on your credit history, which according to, describes how you use money. It is comprised of information such as how many credit cards and loans you have, and your bill payment record.

A high credit score shows that you can use credit well and that typically leads to more favorable outcomes in terms of interest rates and loan approvals. A poor credit history will usually generate a lower credit score. If a lender is evaluating loan applications and sees that you have a less-than-perfect credit history, they may be concerned that they may not get paid back. In other words, you’re a risk. They may not approve your loan, and if they do, it might come with a big caveat – a high interest rate.

If you’re a little anxious about your credit history, here are some tips that can help you improve it:

Pay bills on time, every time

According to Credit Karma, payment history can affect your credit score. Pay all your bills on time. That means every bill including credit cards, utility bills, cell phone, rent, etc.  If you have an outstanding bill that’s already late, pay it as soon as possible. The longer it remains unpaid, the more it will hurt your credit score.

Don’t overuse credit

If you have credit cards and carry a balance, be aware of your credit utilization percentage. This is the percentage of credit you have used compared to the amount of credit you have available. Financial experts, such as those at NerdWallet, recommend a credit utilization of 30% or less.

Take out a small personal installment loan

Sometimes a lack of a credit history will contribute to a lower credit score. This can be the case for people who have never had a credit card or a loan. If you’ve never had credit, the credit bureaus can’t evaluate how you would use it.

Taking out a small installment loan and then paying it back punctually may help you establish a good credit history. Lenders such as our team at Omni Financial offer loans that have fixed interest rates and a set monthly payment amount. We understand that many people in the military may not have an extensive credit history. Our loans can give you the opportunity you need to show the credit bureaus that you are responsible with credit.

Building a positive credit history may require some budgeting in order to make sure you pay your bills on time, but it’s all part of developing healthy financial habits. In the long run it will be worth it!

The information provided in this blog post is for informational purposes only. It should not be considered legal or financial advice. You should consult with a financial professional to determine what may be best for your individual needs.


Posted in Financial Tips & Advice, Video Blogs (Vlogs)