Build Knowledge On The Financial Goal of Building Credit
Money is something that everyone wants and needs, but often finds they do not have enough of it. Most of the time, people do not know the best way to take care of their money. They do not know how to save it, invest it, or spend it in a smart way. Smart money habits are something you need to be taught. They are not something you will just know how to do.
Many of us do not learn those lessons until after we make some mistakes with our money. The good news is that you can learn the best way to handle money before you begin making mistakes. Continue reading to find out more.
Smart Ways to Build Credit
Building credit is a difficult thing because you have to use credit to build credit. If you use credit improperly, then it quickly gets out of control and becomes bad credit. Once you have bad credit, it is challenging to repair. However, if you are smart about your credit, you can build it and maintain excellent credit. If you have no credit, you have to take some smart steps to obtain credit and continue to build it.
Take Out a Loan
If you take out a loan, you must be sure to make the payments on time every month. When you agree to a loan, you are making a promise to pay a set amount of money each month. To pay off the loan timely and maintain your credit, you must pay that amount on the date it is due. It is even better if you can pay more than the monthly amount. This helps you pay off the loan sooner and improve your credit.
Open Up a Credit Card
If you open up a credit card, use it wisely. You want to make sure you do not spend any more money than you can afford. You want to pay off your credit card every month. If you do not pay off the full amount each month, you will have to pay interest. If you spend more than you can afford, you may not be able to pay it each month. The amount you owe on your credit card may quickly get out of control making it something you cannot pay. This damages your credit quickly.
Can a Personal Loan Improve Your Credit Score
Credit Card Basics Spelled Out
Where Can I Find Information?
Building and repairing credit is something that takes consistent effort. It is not impossible, but you have to go about it the right way. You have to be informed about the best way to handle your credit. The good news it there is a ton of information available today. Unless you take some type of finance or business class, you may not get the information you need in school.
This also may not be something that your parents teach you. They may not know how to do that themselves, so they cannot teach you. There are many experts in the area of credit repair who want to provide you information to build and maintain your good credit. You are able to find information about how to build credit, how to maintain credit, and most importantly, how to repair credit.
If you feel like you do not have enough information when it comes to credit, be sure to find one of the resources listed below to assist you:
Apps About Building Credit
When it comes to finding out information about building credit, there are many apps that are available to you. Most of you have our phones in your hands all the time, or what seems like all of the time. When they are in your hands, you can make great use of them by checking out apps that help you build credit. Each of the finance apps have a little something different to offer, so you may have to scroll through a few to find the right one for you. Before you look at the apps, you should have some idea of your desires when it comes to improving your credit. In addition to building your credit, these financial apps can help you understand your spending habits, create a budget, and goals to help you achieve them. These apps can also alert you to your current credit score and provide you tips on how to improve your credit.
Do not feel like you have to love one app over another, or if one app does not work for you that none of them will. You have to be open to trying more than one. Most of the apps are free, or have a free version, so there is little commitment needed from you to try them. A quick hop over to your app store followed by an install is all you need to see which app is right for you.
Different Apps Available
There are many building credit apps that can help you learn more about how to build credit, while also helping you to build or repair your credit. There are two apps that may interest you specifically for their features. You may want to look at these apps first to see if they meet your needs.
Credit Karma
This app constantly alerts you about your credit score. It keeps tabs on it for you and lets you know when there are any changes. It also shows you ways that you can improve your credit score. In some cases, when you check your credit score too often, it can negatively impact your credit score.
Credit Karma gets your credit score without negatively impacting it. It gives you updates weekly about your credit score and any changes to it. The app lets you know what credit cards and loans there are available for which you may qualify. If you are approved for these items, and you use them well, your credit score can improve. Credit Karma also analyzes your credit and determines your habits and how they are impacting your credit. This can help you make sound decisions on improving it.
Mint
This app is one of the most popular apps available. This app does not focus solely on credit score, but it is a large part of it. It will analyze your spending habits and track your bills for you. It helps you determine in which categories you are spending money the most, which can help you change your spending habits.
Mint tracks your credit score and helps you understand it. It gives you insight as to why your credit score is what it is. It shows you how your spending hurts or helps your credit score.
Books About Building Credit
I know, it is like I talk about more technology-driven ways to find information about building credit and then I go to old school books. Books may be old school, but they have always and will continue to be a wonderful source of information. While the apps mentioned above are tied to your money and spending, they can educate you on your specific situation. Books, on the other hand, can give you knowledge about building credit in general. I am going to drop some knowledge on you that might sound crazy but building credit has not changed over the decades.
The way to build and maintain credit today is the same as it was 40 years ago. The information has not changed, only the way you receive it has. The great thing about books is you can hold them in your hands and write notes. You can highlight important pages and flag them with a sticky note. You are able to read it and reread it as often as you need to because it always remains in front of you. Yes, books can be heavy and take up a lot of space, if you have many of them, but before you completely rule them out, check out some of the best books about credit.
Books to Check Out
When you are interested in building credit, there are many books you should read. To get you started, I am going to list a few of them here for you.
Credit Repair Special Edition
This book gives you a list of resources to help fix your credit if that is what you need. This list is for anyone to us. This book also explains how to write a dispute when you disagree with something that is on your credit report. It provides you with templates and teaches you how to navigate arrangements for payments with different creditors.
Raise Your Credit Score in 10 Easy Steps
This book teaches you all about credit scores, including what impacts them causing them to go up or down. It also teaches you how to raise your credit score. This book gives you tips on how to deal with creditors and work through settlements that could save you a lot of money. This book explains what habits you may have that is causing your credit score to go down by 12 points.
Credit for Complete Beginners: Build and Fix Your Credit
This is the book you need to explain everything to you about building and managing your credit score. It teaches you how to read your credit report and look for errors. This book teaches you tips to improve your credit score as well as how to deal with credit card companies.
Websites of Interest
For those of you that are interested in building credit but are not interested in something as old school as books, do not despair. You can find much of the information you want online. You are just a quick search away from countless sources online that can teach you everything you want to know online.
There are articles that will break credit down for you and explain how it works and what you need to know. They will explain what impacts your credit score negatively and positively.
You are able to find resources online that will show you which credit cards and loans might be right for you depending on your credit goals.
You can find out about the various credit bureaus and how they collect information about you and determine your credit score.
The more you understand about your credit score, the better able you are to keep in where you want it. You should utilize all of the resources available to you to find out all the ways you can maintain your credit.
Use Your Time Wisely. Be Informed About Your Finances.
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Creating Goals
While it may seem like the best way to begin building credit is to use credit, such as credit cards and loans and begin paying them. While it is true that you need to have a positive relationship with credit, you also need to start with setting financial goals. If you do not know what you want from your money and finances, you may never improve your credit or get to a place where you are really saving money. If you do not define your goals, you will never understand where you are trying to go.
How to Set Financial Goals that Will Set You Up
You need to determine if you have goals of paying off debt, saving for retirement, or saving for something specific. Perhaps, you have all of these as goals, and that is acceptable, too. What matters is that you have a clear understanding of what you want. You need to determine short term goals and long term goals. Once you create the goals, then you can determine what steps you need to take to get there. Your goals need to be attainable. If you start creating goals that you cannot meet, you are setting yourself up for failure and may become frustrated.
For example, if you have a short-term goal of paying off your credit card in 4 months, you have to actually be able to achieve it. If you have $4000 in credit card bills, that means you will have to pay about $1300 per month to have it paid off in 4 months. This takes into account 20 percent interest and the idea that you are not using the card to make purchases anymore. If you do not have an extra $1300 per month, that is an unreasonable goal that you will not be able to achieve and will most likely frustrate you. Do not set yourself up for failure before you even start
Building A Budget
Another one of your smart financial goals should be to create a budget. If you do not have a budget, you have no idea how much money you are spending or saving and that can lead to disaster. The most important piece to a budget is outlining how much money you bring in and how much money you spend. This gives you clear insight into your financial habits and allows you to make changes as needed.
How Do You Create a Budget For Almost Anything
Once you better understand how much money you actually earn, you can create a savings plan that allows you to have money saved for when need it. You may be able to begin saving enough money that you do not need to make purchases with a credit card because you have the money available to you. If you do not understand how you are spending your money, you will not be able to build, maintain, or repair your credit.
Conclusion
In your quest for knowledge about building credit, I hope you begin to understand that all of your finances are tied together. You need to look at the big picture when thinking about your finances because what you do in one area impacts all other areas. If you are making a lot of purchases on your credit card, it can impact your credit. If you do not have the money to pay off your credit card each month, it may impact your credit. If you have money in savings, you can pay your credit card bill so your credit is not impacted, but now your savings plan may be.
The sooner you understand how it is connected and make changes in all aspects of your finances, the better off you will be. Not only will you be in a better overall place, you will be better able to understand how to build credit and plan for your financial future.