How Important is Credit?
By: NayNay Butler
At some point in all of our lives we are faced with having to deal with credit. You may want to buy a car or a house, and usually the only way to purchase these items is buy obtaining credit from a lender. When I first left home and went out on my own, I never took credit that seriously. I worked at a bank and was introduced to credit cards. It was a wonderful thing to be able to buy that new pair of shoes just by pulling out my credit card and swiping it. After years of being irresponsible with my credit, I learned a valuable lesson. Credit is very important, and it is something everyone should take seriously.
People need to understand that the lower your credit score, the more money you will pay for just about everything. When you move into a new place and you need to have utilities turned on, guess what determines how much of a deposit you will pay? When you go to purchase a car, your credit score determines how much interest you will pay and how much money you will have to have for a down payment. You will then need to have insurance for that new vehicle. Insurance companies will again run your credit to determine how much your car insurance will cost you. There has been statistics done by insurance companies which indicate that the lower your credit score, the more likely you are to have car accidents. I'm not so sure this is true, but in any case your credit is part of your whole life. It is so important to work on improving your credit score because it will ultimately save you thousands of dollars a year. When you have bad credit you are forced to patronize businesses that prey on people with bad credit. Businesses such as rental companies and payday loan stores. These businesses are there to make money off of people who they know don't have a lot of money and usually poor credit or they wouldn't be considering doing business with them to begin with. Now is the time to begin to be smarter with your money, and you can do that by working on improving your credit.
First you need to find out what your credit score is by requesting a copy of your credit report. You can get a copy of your credit report by requesting it from one or all three of the national credit bureaus. They are Equifax, Transunion and Experian. Once you receive your credit report, examine it carefully and make sure there are no errors. If you do find errors, you will need to contact the credit reporting agency to find out what you need to do to correct it. Once you have determined how much debt you really have, you now have to get to work to turn things around.
Begin by contacting your creditors and see if you can work out a payment plan. I realize that in these economic times, we don't have a lot of extra money, but take one small bill at a time and start paying them off. Some creditors are more willing to work with you than others, but don't get discouraged. Remember your goal is to pay your debts off and you can do it with a little sacrifice and determination. My husband and I went many years without using credit at all. Not by choice, but because we couldn't get credit because we had messed up our credit so bad, no one would give us credit. So we paid cash for everything, but it taught us that we needed to be a lot more responsible about spending. We don't always need the things we think we need. Most times it is wants, not needs that we are spending on. That is where the sacrifice comes in. You may not be able to go on those vacations and buy those new clothes for a while, but it will be worth it when you get out from underneath of all of that debt. Before you buy something ask yourself how much you need it, and if you can't afford it you shouldn't buy it. I personally know how hard this is to do because I still struggle with this to this day.
It seems like everyday there is new technology coming out, but you must keep in mind that you can't have every new item that comes out because you cannot afford it right now. The way to begin to get your credit straight is to get your mind right. There were times in my life that I had very low self-esteem so I thought the way to make people respect me was to buy these expensive items so they would see that I was worthy. Now I realize how foolish that was. I learned to love myself and realized that I don't need to impress anyone. I am valuable just because I am ME. So getting your mind right is the first step to repairing your credit and fixing your finances. There are a lot of people in debt today because they spend their lives spending money to impress other people. Change that behavior because it will send you to the poor house.
Remember that credit is so very important and it is time for you to start taking it seriously and work hard at trying to improve your credit.
People need to understand that the lower your credit score, the more money you will pay for just about everything. When you move into a new place and you need to have utilities turned on, guess what determines how much of a deposit you will pay? When you go to purchase a car, your credit score determines how much interest you will pay and how much money you will have to have for a down payment. You will then need to have insurance for that new vehicle. Insurance companies will again run your credit to determine how much your car insurance will cost you. There has been statistics done by insurance companies which indicate that the lower your credit score, the more likely you are to have car accidents. I'm not so sure this is true, but in any case your credit is part of your whole life. It is so important to work on improving your credit score because it will ultimately save you thousands of dollars a year. When you have bad credit you are forced to patronize businesses that prey on people with bad credit. Businesses such as rental companies and payday loan stores. These businesses are there to make money off of people who they know don't have a lot of money and usually poor credit or they wouldn't be considering doing business with them to begin with. Now is the time to begin to be smarter with your money, and you can do that by working on improving your credit.
First you need to find out what your credit score is by requesting a copy of your credit report. You can get a copy of your credit report by requesting it from one or all three of the national credit bureaus. They are Equifax, Transunion and Experian. Once you receive your credit report, examine it carefully and make sure there are no errors. If you do find errors, you will need to contact the credit reporting agency to find out what you need to do to correct it. Once you have determined how much debt you really have, you now have to get to work to turn things around.
Begin by contacting your creditors and see if you can work out a payment plan. I realize that in these economic times, we don't have a lot of extra money, but take one small bill at a time and start paying them off. Some creditors are more willing to work with you than others, but don't get discouraged. Remember your goal is to pay your debts off and you can do it with a little sacrifice and determination. My husband and I went many years without using credit at all. Not by choice, but because we couldn't get credit because we had messed up our credit so bad, no one would give us credit. So we paid cash for everything, but it taught us that we needed to be a lot more responsible about spending. We don't always need the things we think we need. Most times it is wants, not needs that we are spending on. That is where the sacrifice comes in. You may not be able to go on those vacations and buy those new clothes for a while, but it will be worth it when you get out from underneath of all of that debt. Before you buy something ask yourself how much you need it, and if you can't afford it you shouldn't buy it. I personally know how hard this is to do because I still struggle with this to this day.
It seems like everyday there is new technology coming out, but you must keep in mind that you can't have every new item that comes out because you cannot afford it right now. The way to begin to get your credit straight is to get your mind right. There were times in my life that I had very low self-esteem so I thought the way to make people respect me was to buy these expensive items so they would see that I was worthy. Now I realize how foolish that was. I learned to love myself and realized that I don't need to impress anyone. I am valuable just because I am ME. So getting your mind right is the first step to repairing your credit and fixing your finances. There are a lot of people in debt today because they spend their lives spending money to impress other people. Change that behavior because it will send you to the poor house.
Remember that credit is so very important and it is time for you to start taking it seriously and work hard at trying to improve your credit.
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