Two Healthy Credit Habits to Begin

Whether your credit score is low because you have not maintained good credit or simply because you have never established credit, maintaining a good credit score is an important aspect of financial health. Below are two healthy credit habits you can employ now to establish a good credit ranking.

Use Less than 30% of Available Credit:

The amount of credit you utilize accounts for 30% of your total credit report. This number, however, only applies to credit cards, which have a total limit for credit.

Credit bureaus note consumers who use more than 30% of their available credit. Using too much makes the bureau think you rely too heavily on cards to fund your lifestyle. Even if you pay that balance off every month, the utilization is still reported to credit bureaus.

To avoid using more than 30% of your available credit, keep a close eye on your account to check the balance and divide that balance by your available credit. This calculation will generate the percentage of available credit you are using.

If you do go over 30% every month, pay half of your credit card bill before the billing cycle closes! This will help cut down your utilization ratio by the time it is reported.

Carefully Open New Accounts:

You can easily tank your credit score if you open too many new credit accounts. Credit bureaus ding customers that open too many credit card or loan accounts in a short period of time as it may be viewed as a sign of financial instability. This component makes up about 10% of your credit score.

Opening too many new accounts also brings down the average age of your credit history, a component that accounts for 15% of your credit score. Lenders look for borrowers with the highest credit history age possible so avoid opening too many accounts.

When you do open a new account, consider whether it is worth negatively impacting your credit score.

Thank You for taking the time to read our Blogs. 

Mr. Rafael Ulloa 

5 Concrete Ways That Your Credit Score Impacts Your Life

 

There are so many exciting reasons to get out of debt: for example, it can help you free up your personal income, it can reduce stress, and it can help you plan for a more stable future. One benefit of debt freedom that many people don’t even consider until they have gotten out of debt is the impact on their credit score. Though this seemingly abstract number might not always seem like the biggest priority when you are struggling to put food on the table and make ends meet, the truth is that your credit score plays a huge role in many important aspects of your life. Here are 5 concrete reasons that you should care about your credit score:

 

1. Land the dream job. Although not everyone realizes it, employers are legally entitled to view your credit score as part of their pre-employment background check--and many do. Having a low credit score could make you look unstable (or, worse, untrustworthy) which is why having a good score is very important.
2. Buy the car. If you’re hoping to finance the purchase of a car, you are going to need a solid credit score. If not, you could be stuck driving a beater--or even taking the bus.
3. Own your own house. As you can probably imagine, if a low credit score is enough to stop you from buying a car, it can also stop you from buying a home. Even renting an apartment generally requires a credit check!
4. Start a business. One final category of financing that many people seek at some point or another during their lives: business funding. Without a good credit score, it is going to be very difficult to get that new idea off the ground.
5. Pay less interest. If you do manage to get approved for a car, house, or business loan, the amount of interest you pay will be contingent on your credit score.

 

Ready to get out of debt and begin rebuilding your credit score and your life? Visit Madison Monroe and Associates online today to learn how! www.madisonandmonroe.com or simply give us a call 877-346-2797 we are here to help.  

 

Getting out of debt is still possible

According to a study published by the Pew Charitable Trust, roughly 80% of Americans now find themselves in debt. This debt can be piled on in a plethora of ways. For example, the majority of Americans own credit cards--and falling behind on payments can cause debt to pile up surprisingly fast. Mortgages represent another form of debt that, for the vast majority of working and middle class people, is going to be necessary in order to own a home. Student loans, medical bills, and back taxes can also pile up very quickly, and sometimes this can happen completely unexpectedly. (For example when an unexpected illness forces a hospital stay, or when that job you were planning on beginning upon graduation doesn’t pan out right away.) The point is if you have found yourself in debt, you are not alone!

 

The truth is a healthy level of debt can even be a good thing. Think back to the examples of mortgages and student loans: both of these types of debts can actually enable people to attain dreams such as owning a home or completing college that may have been out of reach without outside funding. So debt in itself can be a valuable tool. (This is precisely why credit is so important.) The problem, of course, is when debt reaches a point where you are struggling to make payments.

 

Once this happens, getting out of debt can seem impossible--and your financial life can become very discouraging. All of your disposable income (and then some) may begin going toward making payments that you still struggle to pay. Debt collectors may begin contacting you and your credit may become so damaged that many financial options that were previously available to you (i.e. getting a credit card, taking out a student loan, etc.) become infeasible. The situation can begin to feel hopeless.

 

We’re here to tell you that hope is not lost. At Madison Monroe and Associates, we have helped countless people reduce their debt by 40 to 60%--and we can do the same for you. Visit us online today to learn more. www.madisonandmonroe.com