Credit reports are one of the chief determinants of your buying and earning power. Credit reports tell banks, potential employers, and a variety of non-bank lenders how responsible you are with money. If you have used credit cards in the past and your credit report shows no late, insufficient, or missed payments, lenders will see that you are very trustworthy with money and offer you loans and lines of credit under good terms. If you have no high, revolving balances on the credit card portion of your credit report and you have two to five credit cards, you are in a powerful position.

Unfortunately, most people don't attribute enough significance to their credit use habits. Many people miss credit card payments merely out of negligence. Others have very bad spending habits, spending more money on their credit cards than they earn. In order to have the wealth afforded by good credit reports, you must make all of your credit card payments on time and you should rarely, if ever, have a higher balance on your credit cards than in your bank accounts. Good credit reports entail more than just a clean credit card history, but the credit card is the easiest portion of your credit report for you to control.

It can help your credit history to look more appealing to have at least one other type of loan on your credit report. In order to benefit from this you must have made all of your payments in full and on time. But, with the high cost of credit, it is not worthwhile to take out a loan simply to achieve a perfect credit score. If you've been responsible with a school loan or home loan, you're already covered. You should keep in mind that you can achieve a sufficient credit score merely with responsible credit card use. These credit report scores should qualify you for good rates on most types of loans.

In summary, you don't have to be a big spender or take on a bunch of loans in order to establish a good credit report. Most credit reports on individuals are based mainly on credit card habits. While other types of loans and unpaid bills can impact credit scores, most people can achieve good credit scores merely by using credit cards responsibly and taking credit card payment obligations seriously.