When your credit is good, you will have no difficulties applying for loans or credit cards. In some instances, the personal credit history of a person is scrutinized when applying for jobs too. Basically, being financially desirable is certainly an advantage. Companies and lending institutions will be the one clamoring to have you as a client and you can avail of certain privileges that come from be having a sound financial life. There are many ways you can easily establish good personal credit. Simply follow the following advices.
Pay on Time
Whether you are paying credit card bills, car loans or mortgages, you should make sure that you pay on time. Aside from incurring additional charges such as late payment fees and other penalties, you are at risk of losing personal credit points each time you miss a single payment. For housing loans, lenders immediately provide the Credit Bureau with a negative report even just after one missed payment. At the beginning of each month, set aside the money for your personal credit obligations.
Limit the Number of Credit Cards
Many people do not realize that having a lot of credit card, which they could not even pay, reflects poor spending habits and lack of financial management skills. On the average, an American is said to own at least seven kinds of credit cards. Do not make your personal credit life complicated with so many credit cards to manage. Have a maximum of three personal credit cards that you can easily manage. It is also good for your personal credit to use these cards once in a while. Good credit card activity will gain you points and increase your credit score.
Prioritize
The most common mistakes that people make with regard to managing their finances and personal credit is not learning how to prioritize. Bills and other payments for credit obligations always come first and luxuries come last. If you are having problems with keeping track of your finances and personal credit, lean to list down things. You can even use your personal computer for convenience. There are software programs that could help you manage your finances with just a few clicks. Always separate items that you do not need and if you come into some extra money, then it is the only time when you can buy these things.
Taking care of your personal credit is very important as it is the only way you can enjoy financial freedom. Although it looks a lot of sacrifice and discipline, you will certainly avoid a life filled with letters and calls from your creditors.
On the other hand, not seriously thinking of the state of your personal credit history and continually spending like there is no tomorrow, then you might yourself losing everything you have such as your home, cars and other personal assets in order to pay off all your creditors. Sadly, you will even suffer from the embarrassment of being denied everytime you apply for something that requires a good personal credit score.
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