Credit and You

What is Debt?  And Why do we use debt?

You are here for information about credit scores.  Debt, credit and credit scores go hand in hand. Credit cards, car loans, mortgages, boat loans, home equity loans and lines of credit, payday loans…  all sorts of loans.  You name it, we owe it! 

We have become a nation of debtors, now is time to take control and become a nation of financially responsible people!  Don’t get us wrong, debt is not necessarily bad, but uncontrolled debt is bad.  When used wisely debt can be an effective tool for your financial management. But too often we rack up debt for things that do not help us at all. 

Debt has become a growing concern to families as the economy has shifted.  Many times in good economic times, credit card debt was racked up because of luxury items.  Today, this debt can be incurred to pay for groceries or major bills.  Whatever the situation, you need to know why you have debt and what to do about it. 

Do you know why you have debt?

Do you spend more than you earn and are not able to put a savings plan in place?

Do you make the minimum payment on each credit card all the time or have maxed out the credit limit?

Do you have more than 3 major credit cards?

Does your credit card debt preclude you from purchasing heath insurance, life insurance or other critical item to protect your family?

You find yourself arguing with your spouse about money. Or, you’re are afraid to talk to your spouse about money at all.  Do they purchasing heath insurance, life insurance or other critical item to protect your family?

You find yourself arguing with your spouse about money. Or, you’re are afraid to talk to your spouse about money at all.  Do they even know?

Do you think that bankruptcy may be an option?

Debt must be managed.  Even if you feel that you are already in a high debt situation, taking control and looking at exactly where you stand is the first step to overcoming a debt problem.  Turning your attention away from the debt that has been incurred will only make the problems harder to deal with in the future.  Facing the tough issues right away will make creating an action plan urgent.  And taking control of debt will reduce the stress on an everyday basis.

Why Credit Scores are important?

Credit scores are increasingly being used for a variety of purposes.  Your credit score may be used to establish insurance rates or credit rates. It may be used as a means to figure out how responsible you are.  With your permission your credit report can be pulled by a potential employer, or by your current employer.  It is almost always used when applying for a personal loan, or a loan for a business in which you are a key person. 

What can you do about your credit report?

You can no longer just assume that if you pay your bills on time you will have a good credit score when you need to use it.  You must establish and manage your credit score to make sure it is working for you.  Some of the many ways you can manage your credit are:

-        Establishing credit

-        Maintaining an on time payment history

-        Keeping credit lines open for a long period of time

-        Regularly reviewing your credit information

-        Managing how many credit inquiries are made on your account

-        Understand how credit works

This list is just an example of the ways you can manage your credit report.  A more detailed list can be found in our book How to Get Your Credit Together Today.