Personal Credit Management
It sounds like something a former game show host would be pushing on TV at 2:00 a.m., doesn’t it? Setting credit score goals seems like something our parents would do when they weren’t trying to figure out how to program the VCR or whose car is parked at the neighbors more and more often these days. And you may be tired of being told excitedly about all the ways you can get your credit report or check your credit score – or at least someone’s estimation of what those might look like. We cover a lot of topics across the Goarly family which are arguably more naturally engaging. Factors to consider before refinancing your mortgage? Absolutely essential to any homeowner. The pros and cons of personal bankruptcy? If you’ve ever been in debt difficulty (and who hasn’t?), this has at least crossed your mind. Alternative sources for small business financing? Most entrepreneurs wouldn’t mind knowing more about their options. How to know in advance what impact remodeling that bathroom will have on the sale price of your home? I might read that one even if I didn’t have plans to renovate. (And after reading it, maybe I’d start making those plans!) Here’s a section on personal credit management! *Yawn* What else have you got? Oh, look! “Five things to avoid when considering a debt consolidation loan!” That’s much catchier.
We’re genuinely glad you’re reading the site. And we do try to keep things engaging and accessible for the average visitor trying to educate themselves about how to better reach their personal financial goals. If you stick around for long, however, you’ll notice a common theme in many of those articles about managing credit card options or investing towards retirement or making a new vehicle purchase from a dealer vs. buying a used car from the guy down the street. You’ll start to notice how often we point out the impact different choices can have on your credit history. You’ll notice we do seem a bit fixated on your potential to build credit in almost any financial situation. We’ll admit it – we do have an obsession with the importance of being aware of your ongoing credit score rating and how each choice impacts your larger credit goals.
Our Expertise - Your Credit Journey
Notice that we didn’t suggest you needed to meet our credit goals for you. We’ll never tell you what to prioritize or what to care about. We certainly aren’t going to tell you or anyone else how to spend your own money. What would be the point?
But we do know a thing or two about Americans’ most common financial goals, some of the best ways to make them possible, and the most common things that prevent many of us from reaching them. We may not be experts on your life, your priorities, or your values, but we are experts on the power and importance of a clearly established budget and realistic financial goals. We’ve done the research on how even a few small steps towards reducing debt or cutting expenses can manage credit improvements more quickly than you might expect. We’re not interested in telling what to care about, but we will harp on the power of being honest with yourself about your priorities and your values in action – what you wish vs. what you’re willing to work for.
We’re human beings. There is often a rather embarrassing gap between what we tell ourselves and what we actually do over and over.
So we talk about understanding your credit score and how different choices impact your credit history and why you should take steps to protect identity online even if you don’t think you’re wealthy enough that anyone would want your identity (side note: that’s not how it works). If you have an income and you make decisions, big or small, about how your money is spent, then you’re on a credit journey whether you’re paying attention to where you’re going or not. We don’t keep talking about the need to manage credit decisions because we want to tell you where to go; we keep talking about it because whether you actively manage credit histories, manage credit scores, manage credit potential – your credit score rating exists. It changes with each choice you make. And, perhaps most importantly, it impacts almost everything else that’s possible (or not) in your life.
We don’t build credit because there’s some inherent glory in having a higher three-digit credit score than the guy next door. It’s not an easy topic to work into conversation at parties without people quickly finding reasons to wander off. We build credit because we want to have choices. We build credit because credit impacts almost everything else we want to do or be in our lives. Maybe that’s fair, maybe it’s not, but it’s reality in United States in the 21st century. You want the freedom not to care so much about money and credit scores? Then take better control of your money and your credit scores.
Goal Based Planning
There are probably things you’d like to do – now, soon, or eventually – that require time, or resources, or opportunity. There are people you care about and want to take care of. You can love them without a particular bank balance, but much of what you’d like to offer them takes time, money, or other resources to accomplish. There are things coming in your future which are difficult to predict. Your employment situation could change unexpectedly. People get sick or injured. Someone gets married. Someone else gets divorced. You’ll need transportation. Something needs to be repaired. Even in the best scenarios, at some point you’ll get older and want to retire.
If you know everyone will be home for dinner tomorrow evening, you sketch out a menu and go to the grocery store. If you know someone’s birthday is coming up, you start paying attention to what they like or might need and order it early enough that it (hopefully) arrives on time. If your kids are in school and they have a project or paper due next weekend, you insist they turn of the video games or put down their phones and start working on it now because waiting until the last minute usually turns out to be a pretty bad idea.
Why would your bigger wants or obligations be any different? Even if you don’t have a written list of financial goals, (although you should, along with your monthly budget, savings and investment plans, and general credit goals), you probably have financial goals – whether you think of them that way or not. At the risk of seeming harsh, we have a word for people who just live moment by moment and don’t worry too much about what might come next or how they’re going to meet their various obligations. We call them “children.”
Establishing some basic financial management goals doesn’t require sacrificing the things that are important to you. It requires clarifying what things you think are important to you and what things your current habits suggest are actually important to you. It requires setting some realistic financial goals and paying attention to things like your credit score and your credit history. A few generations ago, this was expected of any head of the household, despite being a major time commitment. Today, it’s increasingly uncommon despite being easier than ever before. The wealth of information available on sites like Creditry, the online tools and connections, and the next generation of mobile apps we’ll soon unveil mean attending to your budget, your savings, your investments, your spending, and your credit, is becoming more like clearing the bars on your fitness tracker than getting a degree in economics.
No technology can replace your decision to start, however. The goals are still yours. We can help you meet them, but you still have to take those first steps.
How credit score affects Personal Financial Goals
If you’re like most Americans, you want to be able to choose where you live. You want to rent a home or apartment you can afford, in a location you like, and of a style or size you like well enough to come home to it every day. You want to buy a house you can feel good about, close enough to work or in the right school district or close enough to friends or family that it can be a place of refuge rather than simply the largest expense most of us will ever have in our lives.
Your credit score impacts whether or not that apartment complex is likely to approve your application. Your credit history determines whether or not you’ll be approved for that mortgage, and what terms you’ll be offered if approved. Do you know that a difference of half of a percentage point can mean tens of thousands of dollars over time? Thousands of dollars each year? Hundreds each month? How different would your life be right now if you magically added $100 to every paycheck? That’s what understanding your credit score can do, if you act on what you learn.
If you’re ever sick or in an accident, you’ll probably want access to decent medical care. You’ll hope your family is taken care of while you’re out of commission. Maybe you have insurance through your employer, or you’re counting on Medicaid or Medicare to take care of things. And we hope whatever you have will be enough. Sometimes it is. Combine those things with a decent credit history and a household budget designed around your own financial management goals, however, and the odds of you coming through without financial disaster have dramatically improved.
It’s impossible to predict what paying for college might look like in five or ten years. It might be free to everyone by the time your child is ready… or it might be more expensive (and yet more important) than ever. What about weddings? Maybe some folding chairs outside your brother-in-law’s house will be intimate and romantic, or maybe you’ll want desperately to do more for your son or daughter – if you can afford it. Family vacations? A new vehicle (for you or them)? Even a decent laptop or unexpected repair can wreck the checkbook if you’re not prepared.
Why Care About Credit Scores and Reports
Your credit score is a major part of determining whether those things are possible, and if so, how much they’ll cost you to make them happen. I don’t subscribe to ID monitoring or check my credit report monthly because I’m uptight or I have nothing better to do. I do it for the same reason I check to see if we have milk before I go to the grocery store. I do it for the same reason I investigate if my dog doesn’t come running like she normally does when the garage door opens. I do it because paying attention is how I prevent bigger problems. If I can’t prevent them, I can at least be better prepared to tackle them.
The impact of each step you take to build credit is cumulative. Making my car payments on time helps my credit score. Catching errors on my credit report improves my overall credit history. That means better terms next time a buy a vehicle. Better terms means fewer fees and lower interest, which translates to more disposable income left over each month. More disposable income means I can do more things I want to do or pay more towards eliminating my current debt.
When I manage credit in this way, that means even more options and better terms going forward. It means creditors compete for my business instead of me scrambling for financing. It means college, or weddings, or vacations, or health care, or retirement. It means a home where I want it or a car I enjoy driving. It means less stress and more choices.
The Goalry Way
We said we wouldn’t set your priorities or make your choices for you, but that we’d help. So what is it, exactly, we can do to support you on your credit journey?
Manage Credit Scores and Reports
The Creditry blogs break down and explain the different things likely to show up on your credit report (or reports – which is another topic we cover). We explain why each of us actually have many different credit scores depending on who’s doing the scoring, and the factors which influence each version. We make it easy to not only get your credit report, but to understand what that report is and what it isn’t. We’ll even help you figure out how to deal with the major credit bureaus if you wish to dispute something on your report.
And of course our informational blogs discuss practical, easy-to-understand and easy-to-implement ways to raise your scores and meet your credit score goals. A few are quick and easy, but anyone promising too much, too quickly is probably trying to sell you something you don’t want. We call it goal based planning because some goals take time. That’s OK, because the ones that take the most time are usually the most worth it.
Protect Your Identity
The Creditry blogs break down and explain the different things likMost of the things you can do to manage credit scores or reach credit goals rely on your ability to protect your identity. Otherwise, someone else could benefit from your hard work to start checking off their own list of financial goals – none of which are likely to be the same as your own.
We’ll help you evaluate the major credit monitoring agencies and understand what ID monitoring actually does and doesn’t do.
We’ll talk through practical, easy-to-understand and easy-to-implement steps you can take to protect your identity online and in the rest of your world, and break down those ads promising to protect identity online.
We’ll even help you figure out if those fancy enhanced identity theft protection programs are right for you.
Unified Financial Perspective
Too often, it’s easy to see our debt-to-income ratio as one thing, efforts to accurately price our home as something else, the receipts we save for tax time as a third thing, and the boxes we check to join our company’s suggested retirement plan as a fourth – each item completely unrelated to the others. That’s not entirely wrong. Each financial realm has its own terminology and sometimes its own rules. At the same time, there are only four basic things that happen with money – we make it (income), we spend it (expenses), we save it (preservation), or we invest it (growth). Everything else is just variations on the theme.
We won’t pretend it’s always easy. Even sitting down to make a list of financial goals or get serious about our budget can be emotionally and mentally draining. Financial decisions can be difficult – that’s why we generally only allow adults to make them. But it doesn’t have to be as difficult as it sometimes seems. There are solutions and answers for almost everything you’re facing or will face. It is doable, and you don’t have to do it alone.
Where would you like to start?
