By Sarinthia Saunders
Disclaimer: This article is brought to you by Transitional Finances, LLC.
Some say credit is TABOO, but I think otherwise. Ask yourself, "Why is credit taboo? What is so scary about it?" Well, a lot of people are afraid to be in debt. They hate owing others money. It's uncomfortable, particularly if you cannot afford to repay them. Whether you're $500 or $5 million in debt, not having a plan to pay off debt is a nightmare that too many people live with. I am not trying to scare the amazing people reading this informative and creative-thinking article. It is simply about instilling the importance of credit. If you are scared of credit, this article is for you. If you'd like to learn more about credit, come on in. If you've been taught that cash is king, welcome to the party. If you use your debit card rather than your credit card, you are the main priority for this article. I am happy that you are here to learn about Self Love and Credit.
Welcome to the party, everyone. Today is the day that you make history. So, let's get started. First off, I would say, "There is nothing scary about credit. You just need a great strategy that fits your lifestyle". BOOM. There you have it; credit is easy. Some people think, "Well, you don't know what it feels like to go bankrupt or have 100 collections or charge-offs with 139 inquiries. Also, student loans that are in default, and having a messed up credit profile from damage done years ago". Listen, I hear that story all the time.
Guess what, you can start over. As long as you are living, you can always change your lifestyle. Do not let bad credit stop you from thinking that you will never have good credit or reap its benefits. Get the help you need to implement a strategy that works best for you. We all are at different stages in our credit. Some are just getting started and are in building mode. Some have years of credit with a few late payments. Some have immaculate credit, and others have terrible credit. No matter what stage you are in, credit is a journey. It goes up and down. It takes time to build, so be patient. One thing that we cannot control is time. We have no control over our credit age, other than it starts to grow when we begin building it. Now that the tension has been relieved, we now have a clear mindset and know that everyone can have great credit because each individual is 100% responsible for their credit. Once you sign up for anything that affects your credit profile, you are 100% responsible for making on-time payments and keeping those accounts in good standing.
Here is the definition for those who do not know what credit is. Credit is the ability of a customer to obtain goods or services before payment, based on the trust that they will pay at a later date. For example, if you go shopping and buy a $1000 purse or wallet on a credit card, you do not have to pay that $1000 in full that day. You can pay it over time while you enjoy the product. My advice for this example is to pay the balance in full the next day. If you can not afford to pay it 2x in cash, you cannot afford it in credit. Credit is not free money. Just because you have high credit limits does not mean you should maximize them.
You may be asking, "why is credit important when I can buy everything in cash?" Credit impacts virtually every aspect of daily life. From the houses we live in, the cars we drive, to the jobs we're eligible for, and the lifestyles we live. Your credit report decides whether you save money or spend more. Also, it represents what type of person you are. If you have a good credit score, 740 and up, it demonstrates you are a responsible person and not a risk to any business lending you money. Nine times out of ten, this person will get a great deal on their interest rate. If you have a score between 650-680+, you are categorized as a small risk factor, and you would get a moderate interest rate. But, if you have anything less than a 650 score, you are considered high-risk and will pay a much higher interest rate, paying as much as double the price for the product you just purchased. A lot of people that are in a high-risk range may feel attacked. Please do not. Just know that you can go from high risk to being the best candidate if you decide to put in the work.
What is a credit report? A credit report contains personal information such as your name, birthdate, social security number, home address, other addresses, and your employer. Credit reports details of bills you have paid on time, been late paying, or missed entirely. They also include loans you have paid off and your current debt amounts. (Ie. Student loans, car loans, mortgage, credit cards, etc.).
As I said before, credit reports are snapshots of your character. They include how much money you earn and how much money you manage. Our main objective is to tell you that credit helps you save money. You just have to be open to learning the game of credit so that you, too, can reap all of the benefits that it has to offer. It all starts with you. Understand who you are, how much of your own and other people's money you can manage, and be realistic about your good and bad financial habits. You are the biggest asset in your life. No one can mess up your credit unless you allow them to, and if they do, know that you can fix it.
My name is Sarinthia, your one and only Certified Credit Specialist that spreads self-love and credit. Check out our website at TransitionalFinances.com and follow us on Instagram @Transitionalfinances. We're available at (201) 470-4457 to service all of your credit needs.
Please stay tuned for more credit tips and information. Credit does not have to be your worst enemy. If you play your cards right, it can be your best friend. Enjoy this beautiful day because you are a valuable person and deserve nothing but the best.