Credit Mistakes One Should Avoid

Credit Mistakes One Should Avoid

Credit world is a risky world. You need to be careful with your moves, as they are all recorded and can be used against you when necessary. Your bad credit habits and credit mistakes become a huge problem, if not addressed at the right time.

If you are new to the credit system or simply do not have the habit of maintaining your cash wisely, it can be an unfavorable situation for you. Is it never too late to learn? No, not in the credit world! The sooner you learn what credit mistakes you need to avoid, the sooner you will arrive at the safe side of the shore.

Not organizing your expenses and bills

As we said, everything is recorded and reported in the credit world. Your credit history matters the most, and you don’t want anything to stain it. However, if you are not habitual of being on time, you will probably end up with a bad record.

Make sure that you pay all your bills on time and separate your expenses so nothing becomes an obstacle in your next payment. There are many services available online that allow you to arrange your bills and expenses accordingly, with timers and calendars and calculate the amount for every payment. Use them and do not make the mistake of being late. Time is money here – literally!

Being ignorant to the interest charges and rates

It is not wise to not be aware of how much interest you are being charged on every transaction you make and at what rate. Whenever you go for getting a credit card, you must make sure the rates you are being charged, so you can compare it with the other options you have. In addition, it also helps when you are taking a loan. You would not want to be stuck in a loan that charges more interest rate than the other option you could have chosen.

Keep your credit limit down

It is like not being given enough money in hand, just so you will not spend it all at once. What happens is, when you know you have a greater credit limit, you are tempted to make more purchases, and that too recklessly, with a hope that you will somehow deal with it later. Do not do that. Do not fall into the trap of credit card companies, which lure you in by offering higher credit limit.

Giving your credit card to someone else to use

Trusting someone with your credit card is actually a stupid and risky thing do. When you lend your credit card to someone to use, they will make purchases that you will not have any control over. They might not  be aware of the interest charges and the rates that comes with each type of transaction. All of this combined will become a problem for you, and if they make any purchase that are illegal, it is you who will have to bear the consequences.

What Should be the Next Steps After You Go Bankrupt?

What Should be the Next Steps After You Go Bankrupt?

Getting up after you have fallen is relatively easy than getting back up after you have gone bankrupt. It is the accumulation of all your bad credit habits and mismanagement over the time that has finally come alive to eat you up – and it did. The only way out is to file for bankruptcy, which is not an easy way out. However, it is not a difficult situation to stay at, only if you understand the process and have enough patience to let it all pass. It may seem overwhelming and daunting to re-establish your credit profile all over again, to attain a good credit rating and to regain your lost confidence.

If you know how to see the wisdom behind all the happenings, you would see bankruptcy as a fresh start, a second chance to avoid repeating the same mistakes and to prove yourself in front of the credit world. Your second chance can be very rewarding if you plan and strategist what your next step would be. You do not want to go wrong now. Which is why there are 3 steps that you need to take after filing bankruptcy.

     Stop letting your mistakes haunt you

This is the first and the most important step before you go any further. You cannot allow your mistakes, even blunders, to keep haunting you and mocking you back. It will only eat away your confidence and you will feel stuck in the place you have landed. It clouds the way ahead and does not let you see the opportunities that you seize. The right attitude here will as your armor. You need it.

     A lifestyle change

The next step is obvious; you cannot keep living the way you did before. Your lifestyle must change to accommodate your current financial situation, a situation that will take time to get better. Cut down your unnecessary expenses. Identify your necessities and essential expenditures. Cut down on luxuries to save money in order to pay off your debts. If you have filed for chapter 13 bankruptcy, you will have to do this at all costs. The authorities will ask you to reorganize your expenses, and until you have paid all of your debt off, it will stay this way. If you have filed for chapter 7, then you will be asked to use your money carefully, No credit will be given to you at any circumstance until your case has been discharged.

     Reestablish your credit rating

Once your case has been discharged, the next step is to build your credit profile. It is a misconception that you cannot get any credit, once you have gotten the word “bankrupt” on your credit report. What you need to do to improve your credit report. For this, start paying all your bills on time. If you have a house, then do not miss out on any of the mortgage payments.

After that, get a secured credit card. It is not as same as the regular credit cards, but it is the stepping-stone you need to cross. It allows you to deposit a certain amount and that amount becomes your limit. They will see how you are repaying your loans, and according to that, will up your limit whenever they feel you are finally learning from your mistakes.

3 BASIC WAYS TO GET YOURSELF OUT OF THE LOAN

3 BASIC WAYS TO GET YOURSELF OUT OF THE LOAN

Being in debt is the last thing that anyone ever wants. Somehow it’s something all of us end up being in one way or another. The economy is just not that good and no matter how hard we work to make ends meet, sometimes it is just not enough. Inevitably have to rely on money granting genies.

However, there comes a time when we all think of paying it off and starting fresh with no burden on our shoulders. We make plans and lists of things we would not do in order to pay back the amounts we owe so we can finally move forward.

Just to make the process easier, here are the three basic and easy ways presented which you can work with to lessen the burden from your hard-working shoulders.

Cut Down The Expenses – Temporarily

The first instinct that we feel when we are in such a situation, Is to cut back on expenses in order to save more. And that should be the first step. You cannot start saving money to pay off your loans by cutting down impulse buying decisions. You do not have to put a hold on every expense but only those without which you can still go about your day, for example eating out, online shopping, ordering late-night food, or buying that green scarf. Of course, this will only be for the time being, until you save enough and pay off at least some significant amount of your loans.

Get A Side Job

If you are working a shift in the day and have enough time at hand to do some extra work, it is always a good idea to take on some part-time jobs to get in that extra cash. You can freelance on the internet for writing companies, for digital advertising companies, or simply take neighbors’ dogs out for a walk every morning. This will take away the extra pressure off you that comes with trying to live on a budget. This way you will have more to save and a little extra to spend on yourself.

Take Care Of The Small Loans First

When in debt, we are tempted to pay off the larger ones first. However, that often leads to the accumulation of many small loans, which ultimately become huge. Therefore, it would be wise to list down all your loans. Separate big and small and begin with paying off the small ones until you are done with them, then move on to the bigger ones. This will not only make it easier to focus on paying off larger debts, but it will also allow you to create a comprehensive strategy with complete peace of mind. Organizing commotions and responsibilities always help.

Ways your credit score can be an issue

Ways your credit score can be an issue

When we think of credit scores, the first thing that comes to our mind is how will it impact our access to lines of credit. However, that is not all that your credit score accounts for.

Your banks and financing companies are not the only ones who look into your credit history and dig up your reports. There are more people interested in your reputation in the credit world. Whether you are opening a retail account, renting an apartment, or even having a car financed, our credit score will always be at the forefront here.

Your credit score is more than a three-digit number. It determines the course of your life in many ways. Here are a few ways in which a poor credit score can be an issue for you;

You May Not Get The House You Desire

Your credit score can be an issue when the time comes for you to buy or rent your apartment or a house. When renting a house, the first thing the house owner sees is your income, so he can judge whether you would be able to really afford it or not.

The second consideration is your credit score! A house owner would not want to rent out to someone who does not have a proven track record for timely payments. So yes, your credit history and your credit score matters here.

You Don’t Get Your Loans Approved

Whether it is a student loan, or a business loan or even a mortgage, if you have a bad credit score, you are less likely to be approved as your credit score would indicate irresponsibility when it comes to making payments. It is not that you will not get the loan. Maybe you will. It is not entirely off the table for you. However, you will not be in their good books, which is why they will charge you higher than usual interest rates just in case.

It Affects Your Bills

You may not have thought about your credit score affecting something as trivial as buying things. But it does. The purchases you make, your monthly subscription, your club memberships, things you buy online, they all will probably charge you higher prices just to make sure they don’t face loss at your hand in case you can’t make the payment.

Your Next Job Might Not Be As Easy To Come

It is not a common practice in every state, but research shows that almost 46% of companies look into the candidate’s credit reports while considering hiring them. It is to make sure that you will not be likely involved in any kind of fraudulent activity, any embezzlement, or any property theft.

Your credit score has the power to affect even the most trivial aspects of your life. A bad credit score is always an issue. Over time it has somehow become the standard to measure a person’s credibility not just limited to banking but anywhere in life.