Building your credit can seem impossible when you’re first starting out, but the reality is that you need good credit for any major purchase. Buying a home, a car, or even applying for financing are all instances where good credit is going to make your life a lot easier. We want you to know that your financial goals are not impossible, with a little bit of preparation and these simple tips, you’ll be on your way to a stellar credit score!
Left unchecked, it’s very easy to max out your credit cards and spend years paying down nothing but interest. Setting up a payment plan is a great way to keep on top of that debt without cutting yourself too short. Consider these payments as a necessary bill and incorporate them into your monthly budget.
Not all debts are created equal. High interest debts, even in small amounts, can easily get out of control. Prioritize paying down cards and loans with a higher rates so that you don’t end up in a cycle of paying down interest.
Credit cards typically have high interest and lower balances, so use them to your advantage. By using your credit card regularly for small transactions and paying it off in full every month, you can build your credit score over time
This one seems pretty self explanatory but it’s the one that people struggle with the most. Keeping up with the Jones’ is overrated and will only leave you in mountains of debt. Take note of your incoming and outgoing expenses, and build a budget that leaves you with as much money left over as possible. To do this, eliminate regular costs that are unnecessary. Do you eat out every day? Do you have an expensive cable subscription when you only watch Netflix? Recognize where you can trim your financial gut and make those cuts. It will be less tempting to acquire credit cards and loans you don’t need when you’re not living paycheque to paycheque.
Debt can be a scary word, but the reality is that it is a normal part of our lives. The key is to weigh “good debts” like a mortgage, against “bad debts” like a payday loan and make informed financial decisions. By using the tips mentioned above, you can build your credit and maintain a debt-to-income ratio that is manageable. Do this and your financial dreams will follow. If you’re looking at purchasing a home and aren’t sure where you stand financially, contact the mortgage experts at Source Mortgage today to find out!
Source was absolutely great to work with - went above and beyond to help us get everything done when buying our new home. Highly recommended!! Chad and Jenelle Richards Jan 09 2013
Chad and Jenelle Richards
Added January 23rd 2013
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