Do All You Can To Protect Your Personal Credit
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by: RobertBain
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Word Count: 690
Your personal credit is very important to your future even if you don't realize it right now. Those credit card offers in the mail can be very enticing. It can be fun to go out and buy whatever you want to. The day is going to arrive though when your mailbox is full of the bills, and if you aren't able to pay them your credit is going to be destroyed.
Establishing your personal credit involves much more than just being able to get a credit card or even a personal loan. It needs to be an ongoing process that you continually monitor. You may not realize it, but having access to an excessive amount of credit can hurt you. For example if you have two credit cards with $25,000 of credit on each of them a creditor will look at the fact that you could potentially get yourself $50,000 into debt very easily and very quickly.
Using your credit wisely means you don't access it just because you have it available. It also means you don't apply for credit that you don't really need. Some people have eight or ten credit cards in their wallet. Why? If they are only to be accessed for emergency purposes then there is really no need for them. The problem though is too many people in our society depend on their credit cards to fulfill their wants. You should be able to pay for your needs on your income.
If you work hard to establish your credit, you can also call the shots with lenders. Let that car dealership know that if a 7% rate of interest is the best they will offer you then you will go somewhere else. Of course you can't say this if you haven't been responsible with your credit. The rate of interest is very important as part of your disposable income is going to be eaten away by it. Why give lenders more than you have to? Car loans are often five years and home loans thirty years. Over that length of time the amount of money you can save with a lower interest rate is substantial.
Always pay your obligations on time so you can avoid late fees. There is no reason to pay $35 because you mailed your check late. If you are never late, consider calling the creditor and asking them to remove that charge for you. In many instances they will be happy to waive it if you ask. You should have enough money in savings to cover your monthly expenses for two months. If you don't, stop spending your disposable income of frivolous things and invest it in your future.
If there is no possible way for you to make your monthly payments as agreed to, you need to let those lenders know right away. Don't assume they will just know what your circumstances are. If you contact them early enough they may be able to help you find a good solution. This is better than allowing your payments to default and go to collections. This is not a responsible way to handle your credit, and it will have a severe affect on your ability to get it for years to come.
It does take some education and some self control to be responsible with personal credit. Parents need to really teach their children about this because credit card companies often target college students even though they have no income. In a very short period of time they can have a pile of debt accumulated. Some parents are able to jump in and save them but many can't. Some students don't inform their parents about it until it is too late because they are embarrassed.
Be very careful with predatory lending as well. There are plenty of credit card companies and lenders that prey on those that are in need of credit. They charge them ridiculous processing fees, high interest rates, and even fees for paying off the funds that were extended to them early. Avoid getting yourself involved with these types of agencies as they are going to cost you money and maybe your good credit as well.
About the Author
About the author: Robert Bain writes about the complicated world of credit. He comments on credit cards, debt relief, personal credit repair, credit ratings, bad credit cards, home equity loans, travel rewards, cash back offers, business credit and personal finance.
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