10 Ways to Avoid Bad Credit, How To Avoid Bad Credit.
Because we live in a society that is dependent on credit, having credit that is bad can make life very difficult. Many high paying jobs won’t hire you. Lenders are unlikely to give you a mortgage. Getting an unsecured credit card will also be hard, if not impossible. It is not a secret that many people have less than perfect credit. But why is this, and what can be done about it?
Many of the credit problems people experience is a self-inflicted wound.
ThereРІР‚в„ўs really no big secret in avoiding bad credit. They key is a balanced view spending money and a good amount self-discipline. Here are the top 10 ways you can do to avoid bad credit:
- Use credit cards wisely. Having at least one or two credit cards are great tools in building credit. However, if you own too many, itРІР‚в„ўs too easy to overspend. Use your credit cards only when you are sure that you can pay back your balance in full on or before your due date of payment.
This means that most people are their own worst enemy, and hurt themselves. They are caught up in having the latest gadgets, clothes, shoes, or electronics. Few take the time to read articles like this to find out ways they enhance their personal finances. Budget your cash. Creating a budget plan is often overlooked but it will help you allocate your monthly salary more efficiently. If you find that your monthly income isnРІР‚в„ўt enough to cover all your expenses, then itРІР‚в„ўs about time to start making some changes in your lifestyle.
Because of this, many people don’t try to change until they’re in debt that may take years to get out of. The best way to avoid debt is to change your lifestyle. Statistics show that the average American household has almost $10,000 in credit card debt, and this should tell you something. Reality Check. Are you living within your means or have you been spending beyond your true capacity? Take an objective examination of how youРІР‚в„ўve been handling your finances. Are your expenses way more than what you earn in a month? Think about ways on how you can save even just a few cents in every aspect of your daily living and see how much you can make if you add up all your savings.
It should tell you that it doesn’t pay to be like everyone else when it comes to your personal finances. Since most people borrow money, you should seek ways to save money. When you are in excessive amounts of debt, it is the credit card company or bank that ultimately wins. Once you credit has been ruined, they are the institutions that will decide if you will get a house or car. Get a lower rate credit card. If your current credit card has a very high interest, why not look for a credit card with more reasonable rates? Just be careful in choosing your new credit card and check all the costs that come along with it aside from the APR. Furthermore, do not close your old credit card especially if youРІР‚в„ўve had it for a long time. Instead, use it once every few months to purchase a small amount to keep it from closing out.
Many people are under the impression that they have to take out loans in order to have nice things. This simply isn’t true. While it is
possible to be responsible with your loans or credit cards, it is sometimes best to simply not use them. Cut costs. Again, there are many ways in which you can cut your expenses. For instance, perhaps you can subscribe to lower cable plan, avoid long distance calls, use coupons in your grocery shopping, bring along a packed lunch to work, or carpool with your friends. Be as creative as you can. If you feel like you’re not responsible or spend too much money, it may be best to just save money instead. While most people go out and get car loans, it may be a good idea to buy a good used car. Instead of going down to the electronics store to buy the latest gadget, maybe it would be a good idea to wait until it depreciates in value. Instead of making a down payment towards a mortgage, why not look at foreclosed homes or tax liens? You should strive to be different from others, especially when it comes to your personal finances. Pay your debts on time. This can be obvious but youРІР‚в„ўll be surprised how any people get stuck in bad credit because they either forgot, overlooked or deliberately refused to pay their bills on time. Never delay or miss on your payments regardless of what type of credit it is.
If you decide to get a credit card, read the fine print. The credit card company doesn’t expect you to, because many people don’t. When you decide to get a home, look for alternative methods to obtaining it other than the methods that will be given to you by real estate experts and mortgage brokers. Claim your unclaimed benefits. Are you a single parent? A senior citizen? Are you entitled to a benefit that you havenРІР‚в„ўt paid obtained? The money you get out of it can be a big help in paying some of your debts. Set aside savings. Do you have an emergency fund? Do you regularly put in some of your money in your savings account? ItРІР‚в„ўs very important to be prepared for the unexpected. What will happen if youРІР‚в„ўre suddenly laid off from work, or if you got sick? You should have some fund in your bank that is good to financially support you and your family for at least six months.
The secret to avoiding bad credit is not to do what many people do. Don’t follow the crowd. Stop listening to the advice of so called “experts.” These people are often not looking out for your best interests. Get a medical insurance. Do you have a health insurance policy? Hospital bills can put you in a bad debt situation as quickly as you can imagine. Having a health insurance protects you from unnecessary trouble when an emergency arises.
Many people have bad credit because they lack discipline. They are not willing to “think outside of the box” and find creative ways of getting what they want. They choose to go for the easy money that is given out by credit card companies and banks… [read more] Check your credit report. When was the last time youРІР‚в„ўve seen your credit report? All consumers are entitled to a free copy of their credit report once a year from any of the three major credit bureaus (Experian, Equifax, TransUnion). Regularly keep track of your account to be sure that youРІР‚в„ўre always in good credit standing.
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