Sunday, October 28, 2007

Why good credit is good

Good credit is like money in your pocket. Even if you have no credit and lots of money this is still not good. The lending industry these days view someones credit history as a gauge for how they might repay a loan. If you have no credit there is no way to know if someone actually pays their bills and on time. Sometimes you can provide what is called alternative credit to show how you pay your bills, ie; utilities, car insurance, rent/housing, etc; In today's times lender's are more apprehensive in lending when there is no history of repayment unless you put down a good amount of money which in most lender's eyes says you won't walk away at the risk of losing all that money, just as if you threw it out the window. There are many things you can do to improve your credit when it is tarnished. Some people think once they have the bad credit there is nothing to do about it.
I have been in the Mortgage business 24 yrs. and my credit is not what it should be. However, I have been a single Mom for many years and that does sometimes put many extra strains on how we dole out our money in order to continue with daily life. I have struggled and still do with tarnished credit against me. I am working to get it cleared up, but it does take time and diligence everyday. I have found that most of us like to spend, spend, spend. I have not really done a lot of spending, but I have made stupid choices in what I may have spent money on and thus the snowball effect takes place. I know many people in my position that only have themselves to borrow from and in the end that costs us much more money than we ever intended. I believe that good money skills should be taught when you are a child and I know I wasn't. My Parents struggled when my Brother and I were young and eventually they got it all straightened out and got through it. I watched this and both my Brother and I have continued to have money issues, rough credit and no savings. I am now a homeowner and have started saving with a small savings account and through a 401K at work. If you really think about it, the cost of a pizza meal delivered is what you could put in a savings account a month. If that's all you can do for now, that is a great start. It is never too late or too little. I have 2 boys and I am trying to instill good spending and saving habits and it is still difficult to do. My oldest is 23 and works now for 15 mos. and keeping a job was the most important part first, now it is about saving and not spending. My other son is 15 and of course likes to spend money he doesn't have. I am working on that as well.
So my whole point is that you may hear out in the world that you must save so much and if you don't start when you are an infant you will never have any retirement, all this negativity, anyway, you can do whatever you want as long as you continue to think positive and make positive changes, large or small. You can do it. So today start writing down how you can improve your whole financial picture without taking food off your table or doing without. Try brown bagging your lunches more, making meals at home more. None of this will kill anyone, it is what our families did and we need to stay away from the fast food life as much as possible, so much more expensive yet people today have gotten caught up in the fast lane of life and forget really how to live. So start today to show yourself how you can begin to improve your credit quality and become a homeowner someday yourself or buy that new car that you need and learn to change your spending habits. All of this is just about 3-6 mos away if you really put your mind to it.

Remember: Make good choices.

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