Taking steps to improve your financial skills includes understanding how to be smart using credit before you ever open any credit account. If you don’t take credit seriously, you may run into issues when applying for a mortgage, car loan, or funding for education through a loan.
National Get Smart About Credit Day occurs each year on the third Thursday in October and is a holiday to help you take control of your credit and secure your financial future.
Using credit responsibly is one to support your financial security and make the most of your income. Here are a few tips to keep in mind:
In order to be smart using credit, you need to review your credit report for a complete view of your debt and lines of credit and check for errors. Reviewing your information will help you gain confidence by allowing you to stay on top of any changes.
Credit should not be used to purchase items you cannot afford; it is a tool to show lenders that you are trustworthy in paying them back. By setting a budget and living within it, you will avoid using credit to overextend yourself.
Late payments impact your credit score negatively and affect your ability to open new lines of credit since your trustworthiness is in question. Paying your bills on time is extremely important.
Closing an account can increase your overall credit utilization rate and may not be smart using credit. However, it can be helpful if you want to eliminate cards with high-interest rates or annual fees. Make sure you have ample credit available to you before closing an account.
Debt consolidation is the process of combining two or more debts into a single, more considerable debt. Debt-burdened consumers often choose to consolidate, but there are a few things to keep in mind when considering consolidation:
Consolidation is not a solution for solving financial problems and does not guarantee that you won’t go into debt again. If you have a history of living beyond your means, you may do so again in the future. Creating a budget that works for you and committing to it is critical.
The new loan could come with a higher APR than you had initially thought. Ensure to do your research before signing.
Learning how to be smart using credit is critical to your financial future. Work with your financial professional if you need help managing your credit or have questions regarding credit use.
Disclosure: The sources used to prepare this material are believed to be true, accurate and reliable, but are not guaranteed. This information is provided as general information and is not intended to be specific financial or tax guidance. When you access a link you are leaving our website and assume total responsibility for your use of the website you are linking to. We make no representation as to the completeness or accuracy of information provided at this website. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, websites, information and programs made available through this website.
Senior Planning Services offers a broad range of services from retirement planning, insurance products, Medicare supplements, long term care, and estate planning. We can also assist you with reverse Mortgages and personalized guidance into your retirement years. Contact us today to get started and schedule your first appointment.