All About (Your) Credit
And how to maintain or fix it.
Let's start with 2 promises:
Maintain a good credit score and you pay less. Period.
Buying? Renting? You pay less with a good score.
Bad credit scores can force you to pay more.
That's the reality.
And here's another reality:
Already have credit problems?
Just starting your credit journey?
Do you have perfect credit?
Doesn't matter.
We're all in the same boat....
Let's dive in a tad deeper with this video:
So, here's what credit is:
An arrangement for you to pay for something at a later date.
Kind of like... "Okay, gimme the car today, and I'll pay you later."
But there's a lot to it...
Do you know how important that credit score is to money in your life?
As said, a credit score tells businesses and employers how responsible you are with paying back loans and certain bills. Credit bureau agencies track your spending habits, and then rate you.
Credit scores are used (by about every business) to determine if you are trustworthy. And your credit score really does follow you everywhere.
That's why credit is so powerful.
In fact, it's one of the most powerful things you'll ever possess.
The Big Lesson:
You alone, are the main factor that determines what your credit score will be.
How empowering is that?!?
It means you can control it.
Think about this:
Do you have $10,000 in cash to pay for a new car?
No? Well, do you have $250?
Credit may let you pay the $250 down and borrow the rest.
These five actions usually determine your credit score:
1. Do You Pay On Time?
If you pay your bills on time, your credit score goes up. If you don't... Well. Duh!
2. How Much Do You Owe?
Do you have a loan? Do you have a balance on a credit card? How much "credit" you have outstanding determines part of your credit score.
3. How Long Have You Had Each Piece Of Credit?
Have you had a loan for 2 weeks, or have you been making loan payments for 5 years? The difference matters. A longer history of credit contributes to a higher score.
4. What Type Of Credit Do You Have?
A credit card with a $1000 limit is valued differently than a $250 credit card at the local store.
