Bad credit is created by overextending yourself. When you borrow more than what you can comfortably pay back, your home, your car, credit cards, and you do not have the right habits and schedules in place to pay your debts predictably, early, without worry, you are living outside of your means.
There are many problems that create a situation of over-extension. You could be trying to impress your neighbors, friends or colleagues. Your desire for more could put you in the hole by applying for more than you can pay for. Procrastinating on payments, borrowing with unsure income, and many other situations also contribute. Another problem is that many people confuse the word "credit" with "credit cards" instead of credibility and integrity in your finances. It is a picture of trust and reliability that others can view about you. Credit cards are only a resource.
So how do you make sure you are living within your means when you borrow?
1) Only have 1 - 3 credit cards and use them only for purchases that you have the cash in your pocket to afford. Also, make it a habit to pay your bill every week, not every month. Early payments look much better than on time payments, and they work to protect you better as well.
2) Hold yourself to realistic financial standards. If your income only allows small expenses right now, honor them, and make it a goal to build your line of credit so that you can purchase assets to increase your income. Remember, credit is a gateway to greater income, so the better you treat it, the better benefits you will receive. Don't allow "keeping up with the Jones'" to sabotage your credibility.
3) Do not use your credit cards as income. Credit cards are only meant for small purchases that you have the cash on hand to handle. Do not use credit cards to pay for other credit cards, and do not use them when you do not have the money to care for them.
What you can do to make your credit scores, lines of credit and reliability grow?
1) Make your payments early, not on time.
2) Make your payments more than 1 time each month. Pay your credit card bill at the end of each week.
3) Never miss or be late on your mortgage payment.
Tamara Rasheed dedicates her life to helping people define what "living life at its best" means for them as a Life Coach, Professional Credit Specialist, example, guide, mentor and friend. Alongside authoring the book Better than Credit Repair her Personal Credit Development program has received an endorsement in 2007 from Michigan Works! Livonia Service Center backed by the Michigan Department of Labor and Economic Growth.
Visit Tamara Rasheed's Website
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