Your credit history helps lenders, banks, and other financial institutions assess how reliable you are when it comes to repaying borrowed money. Building it up makes it easier for you to establish your creditworthiness and improve your chances of obtaining approval for loan and credit card applications. It also opens doors to financial opportunities, such as higher credit limits or lower interest rates on future loans. Without a good credit history, you may find it challenging to access these financial benefits or pay more in interest over time.
How Can You Build Up Your Credit History?
Compared to other countries, credit history is not a widely discussed topic in the Philippines. However, it remains essential to managing your financial life, especially now that more financial services are adopting global standards. While credit score systems may not be as accessible or familiar to local consumers, there are still ways to build and improve credit history, even in this context. You can employ these strategies.
Apply for a Credit Card and Use It Responsibly
One of the easiest and most accessible ways to build credit is to get a credit card and use it responsibly. Regular use of your credit card, combined with on-time payments, helps create a positive credit record. The good news is that it’s now easier than ever to apply for a credit card. If you’re a Landers member, for instance, you can initiate the quickest credit card application in the Philippines using the Maya app and get yourself a Landers Cashback Everywhere Credit Card. It’s a straightforward process, just do the following:
- Go to the Cards tab and click Apply Now for the Landers Cashback Everywhere Credit Card banner.
- Enter your Landers membership number.
- Choose a cardholder name.
- Choose a billing date.
- Complete your application and get your credit card details on the Maya app.
The card, which can provide you with between 3% and 5% cashback for Landers purchases, is an excellent option if you prefer to shop for premium goods and supplies for your home. Using the card also lets you enjoy 2% cashback on dining spends, and 1% cashback on other qualified transactions.* This is a practical way of acquiring your everyday essentials while also building up your credit history.
Make sure to pay your bills regularly to maximize the opportunity to build your credit history. By paying your balance in full each billing cycle, you’re showing that you can manage credit well while avoiding debt accumulation. Missed or late payments, on the other hand, could harm your credit standing, so always keep track of payment due dates.
Pay Your Loans on Time
If you’ve taken out a personal loan, car loan, or home loan, timely payments are key to improving your credit history. Each time you pay your loan on time, you demonstrate to lenders that you’re reliable and capable of managing your debt. This information is often reported to credit bureaus and helps build a solid credit history.
Remember: even if the concept of a "credit score" isn't as visible in the Philippines, lenders still keep track of your payment patterns. Your history with paying off loans can influence whether you’ll be approved for future loans, and whether you’ll get better terms such as lower interest rates.
Make Use of Your Bank Accounts and Bills
Although traditional credit products like loans and credit cards directly impact credit history, the consistent use of basic financial services also helps establish your financial responsibility. Paying utility bills such as electricity, water, and internet on time is an indirect way to build your creditworthiness. While these payments aren’t always directly reported to credit bureaus, some financial institutions do take them into account when evaluating a borrower.
Banks may also consider your banking behavior when deciding whether or not to offer you credit products in the future. As such, maintaining a savings or checking account and avoiding overdrafts can be a way of showing these institutions that you value financial stability.
Avoid Over-Reliance on Cash
Cash transactions are still a dominant part of the local economy. However, solely relying on cash can limit your chances of building credit history, as paying using cash does not leave a lot of recorded information. In comparison, when you make purchases using credit and pay those off responsibly, you create a record that can be reported to credit bureaus.
Even if you prefer using cash, it’s still a good idea to regularly use a credit card for small, manageable purchases. This way, you build a track record of responsible borrowing that lenders can use when evaluating you for future credit.
Diversify Your Credit Portfolio
A well-rounded credit portfolio shows that you can manage different types of credit responsibly. This means having a mix of credit products, such as credit cards, personal loans, or installment loans, and repaying them consistently. If your credit history consists solely of one type of credit, consider diversifying with a new product, such as a small personal loan or a secured credit card, that you can repay easily.
However, be mindful not to take on more debt than you can manage. Your goal should be to borrow only what you actually need and show lenders that you can responsibly handle these different types of credit without overextending yourself. If you are unable to manage multiple types of credit products well, then taking on more debt can have the opposite effect to what you are aiming for.
Be Cautious with New Credit Applications
While it’s important to have access to credit, be cautious about applying for too many credit products at once. Every time you apply for a loan or credit card, the lender makes an inquiry into your credit history. Multiple inquiries within a short period can signal to lenders that you’re desperate for credit or may be overextending yourself financially.
Instead of applying for multiple loans or credit cards, focus on managing your current credit well prior to asking lenders for new products. Gradually adding new credit after you’ve shown a track record of responsible use can help you improve your credit history over time.
Building credit history is essential for accessing better financial opportunities, and it’s possible to improve your creditworthiness in the Philippines, even if the concept of a credit score is still emerging. By using credit products and credit cards like Landers Cashback Everywhere Credit Card responsibly, you can gradually build a solid credit history. Over time, this will open the door to more financial options, better loan terms, and improved financial security.
*Transactions that don’t qualify include: cash in, cash advance, quasi cash purchases, casinos and gambling, fuel, supermarket, pharmaceuticals, utilities, telco, and government.
