Why is your credit score so important?

 

Let’s start off with the basics. Credit card companies lend you money through your account number or your card number. This is called leverage. They give you a monthly limit in which they figure out based on your credit history. They do not just lend you the money they charge interest on their money you have spent. This is the percentage rate. You as the consumer want to get the best interest rate with the highest available balance. This is not a shopping spree. you will have to pay the card company either the full amount, minimum or an amount you have budgeted. The interest rate will be charged on the amount of money you have borrowed from the credit card company. If you pay the card off by the due date you don’t get charged the interest. That is the best way to use your credit cards. However, we have all been in the position where we don’t have the cash so we need to use the credit card to make a purchase. This is the best-case scenario like having an emergency fund at your disposal.

 

Here is where your credit score comes into play. If you have a low credit score you will not be eligible for most cards, or if they do approve you the interest rate will be above 15% at the minimum. Your score will also affect the available money you can borrow from the credit card company. This score is not the end all there are ways to improve it. This score moves from month to month based on your activity.

 

First you must find out where your credit score is to see what you can do to improve it. We use

 

 

When you get your score take a look at every aspect that makes up your score. Also make sure there are no marks against your score that are mistakes. Reviewing your information is very important. If there is a mark against you research it to see if that was actually you doing it. If it wasn’t file an appeal and see if you can get that mark removed from your score.

 

 

Once you have found out where your score is let’s work on raising the score. When you are younger, and you have no history of credit it’s time to build. First you must find a card that you will be accepted into. Through a little research you will start finding offers.

 

 

Once approved you have to be smart with the utilization of your credit. Don’t spend the max limit. Remember this is borrowed money so you will have to pay interest on the money you can’t pay back. Secondly make sure to make your payments early or on time. Mark your calendar or leave a note on the fridge or your monitor on the due date. This date rarely changes. We suggest paying the balance of fully but if you can make more than the monthly payment. After a few months of on time payments and not using the full amount your score will start increasing. Once the score starts increasing go ahead and apply for another card with a better deal. You are looking for a lower interest rate and higher available borrowing.

 

While building your credit do not go and apply for every card you come across. The more banks look at your credit scores the more marks against your score. If a bank or creditor looks at your score that is logged against your score. The more times they inquire the more of a red flag pops up. We are working on building your credit not destroying it.

 

Be patient with your credit and work towards a number goal repeating the steps but not getting carried away. Reviewing your score does not inquire against you. Always track where you were and where you want to be.

 

Credit is a part of adult life. We do not imply to build debt. We are helping you build a good score so when you want to make changes to your life such as getting an apartment or buying a house you will not be declined the chance. Your credit report will paint a picture of your spending habits. A good score will save you money in the long run with not having to put extra money down to rent or buy a house.

 

Use these tips wisely we are here to build your credit not debt. However we all fall into debt sometimes. If you have an overwhelming amount of debt and want to take control of it look into getting a personal consolidation loan. This can help lower the interest and you can take control of your debt situation.

 

 

 

Money Saving Guide

 

There are many ways to start saving money now to have a wealthy future. Its not just a technique its also a mindset. You must be mentally locked into your goal of saving money and getting out of debt. Listed below is a guide to saving money. Think of our guide as a procedure, something that needs to be acted on daily.

Here are the 3 platforms you need to start saving money in.

1. Saving an emergency fund

2. Saving for a big purchase

3. Saving for retirement

Saving an emergency fund. What is an emergency fund? Its 3 to 6 months salary in an account for any type of emergency. This must be done first before any other accounts are started. Emergencies vary from the refrigerator going bust or ultimately losing your job. If you have this savings put away these emergencies will not hurt, you as hard as if you didn’t have this account.

How do you start saving your emergency fund? First start with your goal number. If you take home $1000 a month your emergency fund will have a goal of $6000. This isn’t a one-time payment this can be done over time. This is where we must start changing your mind about money. It’s called pay yourself first. Most people pay bills and rent before they even put a dollar away for their future. We need to stop this right away. Their budgets are usually what is left over. The new budget should be pay yourself, then bills. What is left over is your spending money. This all comes down to budgeting. If you fail to plan, you plan to fail. Get all of your bills and liabilities written down. This is the money going out. Add them all up and deduct that from your net pay. Take a percentage of the money left over and deposit that into an account you can access easily if an emergency shows up. This is when you start building your emergency fund. Set a small goal at first like I need $1000 in 3 months. And reward yourself for hitting that goal with a small present like a favorite dessert. Remember we are saving money so do not go out on the town if it can affect your savings.

Saving for a big purchase. The American dream is owning a house. This can possibly be the biggest purchase of your life. You want to start saving for this purchase only after you have your emergency fund fully funded. Big purchases also include a new car or even sending your children to college. This savings is started after you have built your emergency fund. The money you were putting away for your emergency fund can now be directed to this account. Set quarterly goals and hold yourself accountable to saving money in this account. Take notes on why you did and did not invest in this account. Learn from your mistakes. This is your money make sure its going to the right place.

Saving for retirement. This should be started the second you enter the workforce and start making a salary. Do not worry if you didn’t its never to late to start investing into your retirement. The advantage to retirement savings is compounding interest will work in your favor. Compounding interest needs time so make sure you take advantage of the time. There are many ways to contribute to your retirement. There are programs live 401k, IRA and Roth IRA. We believe in multiple streams of retirement income. If you have the opportunity fund them all.

Here are a few more tips to saving money:

• Always see if there is a coupon or coupon codes

• Don’t carry a lot of credit card debt. If you can’t pay cash think about the purchase

• No spontaneous spending

• Bring lunch to work a few times a week

• Make your coffee at home

• Cooking your own meals is cheaper than take out

• Shop smart

• Always ask yourself do I really need it

• Create a budget and stick to it

• Don’t use ATM’s that aren’t from your bank

• Make homemade gifts

Remember you must take control of your money. Do not let it control you. Making the smart and economical decisions now will lead to a more financially stable future.