Bad Credit and Your Financial Future
Updated: Aug 27, 2018
When you use credit as revolving debt, you never get off the ride. Credit should be used as a means to an end, not as a way of life. Back in our parents and grandparents day, credit might have been a tab kept on a sheet of paper or in a composition notebook at the local Mom and Pop general store. Patrons were allowed to run their tabs until the end of the week which was normally payday. In those days, communities were small and everyone knew each other and understood your situation. If the debt could not be settled, extensions were granted and sometimes assistance was offered. Fast forward to today and my how things have changed. Creditors do not care about your personal situation, they want to be repaid. Now this does not mean that most will not work with you, but at the end of the day, the only thing lenders want is to receive the monies owed to them and to be paid on time.
Here are a couple of tips to help you boost your credit score (1) pay your bills on time; some creditors will report late payments as early as 31-days which can affect your score immediately and (2) do not charge more then you can afford to pay in full each month or at least have a plan to pay off the balance sooner rather than later. This plan could include you paying off what you have charged before adding more to your bill. These habits can improve your score as much as 20 points. So, if your score is below prime (under 620); just implementing these two tips can boost your current score.
The unhealthy use of credit is where many people get into trouble as they are usually supporting a lifestyle and then credit will be necessary to support their lives. They charge more on their cards than they can afford to pay in full and continue this practice each month. Sometimes the use of credit cannot be avoided as life happens; however, if you start early with the mindset of saving for that rainy day, you can possibly delay or never start the habit of depending heavily on credit. Don't let this be the reason you HAVE to work until age 70. If you would like to learn more about restoring and rebuilding your credit, register here for my 2-Week Financial Workshop in September-https://www.eventbrite.com/e/4th-annual-financial-bootcamp-ajm-financial-llc-tickets-47390222431?aff=eac2.