Use Credit Well
steve clayton
What do you think of right away when credit is the topic of conversation? Logically, it would be credit cards and maximum limits. When thinking credit, there are two rules: discipline and control.
Why did the bank not approve our application for a loan? Did we ever think that the reason could have something to do with how our credit behavior hasn't exactly been a model of discipline and prudence?
"Sky's the limit" is what some high income earners tend to think. When they engage in irresponsible spending, they tend to forget that they have a credit history to protect. Because they earn high salaries, they think there is no tomorrow and go beyond their credit limits or max out their credit cards.
"The one who pays his debts on time is the poor man on the street", he revealed.
What kind of lessons can we learn from responsible spenders like that poor man who pays his bills on time? In what way do we spoil our credit and our reputation?
Having too many credit cards in your wallet. Is it so hard to say no each time a store clerk waves an application at you, inviting you to obtain a credit card? He or she will often say that it won't take too much time, and that you'll even receive a token of the store's appreciation. It's called grabbing a share of your wallet. Stores are aware that if you have their credit card, you'd most likely be unable to resist the temptation of buying on credit;
Not making payments when they're due can get you into trouble - not only with your bank but also with the credit bureau. People get into the habit of waiting until they receive their next pay check, and they think that a missed payment or two won't adversely affect their credit report. They should re-think this because every missed payment leads to more missed payments in the future. That's the sure way to damaging one's credit history.
Not respecting your credit ceiling. Your credit card and bank loans have limits which you must respect. By not spending on a whim, you might be able to stash cash away for when you most need it, like when a family emergency comes up. Reserve some room in your credit for genuine - not capricious - needs.
Requesting higher limits on credit way too often. It becomes a vicious circle. You spend, overspend, request an increase, max out your credit card, then make another request for another increase. It's a never ending cycle that puts you in a serious credit crunch.
Absence of a budget - when people don't have a spending plan, they waste their most valuable resource: money. It is the very absence of a budget that drive people to get into debtand into trouble when they can't meet payments.
Be Credit-Savvy
Always remember to practice restraint with credit. Don't go into an "application spree" and apply for every credit there is. Don't compromise your financial health.
Want some tips on how to handle credit intelligently?
First, destroy all your other credit cards and keep only up to three cards - the ones you use all the time. Pay your bills promptly.
Step # 2: stay away from any additional offers of credit. Spend money you have today prudently, don't spend tomorrow's money.
Three, review your credit report at least once a year. Challenge any inaccuracies you read in the report
Fourth, instead of skipping a deadline payment, why not try to make some sort of payment, even if it's under the minimum payment? This is a lot better than not making any payment.
Five, if you can pay for products and services with cash or debit card, do so; leave your credit cards at home
Step # 6: Control your spending. Act like a frugal person and don't fall for all those products promising to make your life more comfortable.
Steven J. Talrechi has written about credit reporting and credit reporting practices for over 10 years. His expertise is in helping people obtain a http://www.badcreditnic.com/ 2nd chance checking account and http://www.badcreditnic.com/ 2nd chance bank account when they have been declined by other banks.
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