Credit Building Process Ruined By Debt

Credit Building Process Ruined By Debt

Credit Building Process Ruined By Debt. I, like many Americans, live paycheck to paycheck. If I pay all of my bills including the minimum payments on all of my debts. I will barely have money to do anything except drive right back to work and repeat the cycle. Do I feel bad? No, because it feels normal.

For the sake of context and full disclosure let me tell you a little bit about me. Perhaps you will be able to relate. Everything I’ve ever bought (with a few exceptions of course) I bought with debt, meaning, I financed it. Growing up this was normal. In fact, I had no personal relationships with anyone that did not do this exact thing that I now found myself doing.

You can say this way of living was a learned behavior. Family members and friends all struggled to make ends meet. However, we all still just wanted to have nice things. Everyone wanted to look the part. No one that is mired in struggle wants to look like it, that’s for sure. I can honestly say I never have had a personal credit building or personal finance conversation with anyone that I was related to.

There was economics class in high school but we had to start a business. That is the only thing that I knew a little about. More on that topic later on if you continue to follow my journey.

Back to the debt is ruining my credit building process background info

Everyone was working class in the community. Most of the people I have ever met in my life all were at least striving to be better. I cannot speak to how hard anyone was trying but. I can say that I always tried very hard. I’ve been working since I was 13 years old. With the help of a school counselor who got me my first paid internship and a workers permit. I was out in the world earning money.

It wasn’t until I was 17 years old that I realized I was a legitimate adult. I graduated high school at 17. I was just a hair younger than a college student. I also gave myself the gift of an early start in life by securing the keys to my very first apartment. Great right? Not exactly. I had an empty one bedroom apartment.

I went to a furniture store to try and furnish the place. I had $500 in savings and $1000 cash. I left the furniture place with everything that I needed and did not spend any money! I signed up for a monthly installment loan for the amount of the items which was $5000. My family and friends will be so proud of me at the housewarming, I thought.

As you can probably guess, I spent $1,500 on a housewarming party. Everyone was having a blast and it all felt worth it. At least, until I realized that I had to clean up the mess when everyone left. I also had no more money and no food leftover. So, I did what anyone else would do.

I applied for a credit card. Until it arrived, I went to family and friends homes and stayed long enough to eat then I’d be on my way. I did this for 10 days until my credit card came in the mail. from the moment I activated the card the $500 credit limit I was approved for was spent. I knew that I had been going to work so I also knew a paycheck was around the corner.

When I got paid I only paid the minimum balances on my installment loan and my credit card. Not because I couldn’t afford to pay it off but because I had the illusion that I still can have money left if I don’t. Childish or foolish? Either way, I didn’t know better I certainly did not do better.

Now at 31, this has become the story of my life. Looking back I have found the root. the very beginning of the problem. I had no financial knowledge and I hadn’t thought to seek any. Until now.

I am in debt and have been in debt since I was 17 years old. I have never, not carried a balance, and I have never been able to be debt free. Everything I have ever wanted cost more money that I could afford at the time. I always wanted instant gratification.

As you can tell, debt is still ruining my credit building process

I now am aware of credit. About 2 years ago, the highest score I was able to achieve was a 774 across all three credit bureaus. All of those years of debt actually allowed me to get more debt. I had racked up some collection accounts, a public record, a repossession during the economic downturn (only 2 years out of high school), several charge offs and lots of inquiries.

I always had a good credit mix and my age of credit the last time I checked was 7 years. My positive history outweighed my negative history but the negative seemed to carry a weight that I did not know about. I never knew how to read a credit report. I never knew that my credit report was my documented financial history with lenders.

As I have become aware I have done extensive research. I have read books, watch 1000s of hours of videos and am now confident that I know all about credit, credit building, and credit acquiring. to such a degree that I am writing this. Full disclosure I have just gotten off of a 12-hour shift. I am a machinist by trade and it is a true blue collar job it is also hard work.

I am $38,000 in debt and I make about $44,000 per year. For the first time in my life, I have a positive net worth. I am in full debt pay down mode. I no longer carry a balance on credit cards. I make more than the minimum payment when applicable and I am committed to the process. I have sacrificed my eating habits, entertainment habits, and trying to impress the ladies by spending money habits.

I am currently in credit disputes. I am rebuilding my personal credit via credit repair. My entire credit building process is simple. I have 2 credit cards, one car loan, & 2 student loans. I have made on-time payments each month for the last 7 consecutive months. I pay off credit card balances in full by statement date. I pay the minimum balance on my student loans. However, I pay more than the minimum on my car loan. In theory, I can pay off the car loan in about 8 months. Then I’ll use the payments I was making to the car loan to pay the student loans. Plus the actual student loan minimum I am used to paying.

It will take about 1 year to pay off the student loans from the day that I pay off the car loan. I estimate about 2 1/2 years unless I increase my income somehow. I feel like my credit will be much better without the debt. I have a solid history and I am seeking to get the 3 major bureaus to remove all of the inaccuracies that I found on my credit report.

I was told that if I had no debt on my credit report that my score would be in the 700s even with negative items on my credit report. The debt is suppressing my score. 6 late payments, 1 collection, 12 charge-offs, and 18 inquiries sure don’t make it any better.

Are you in a similar situation as me? If so, follow my journey as it may inspire you. I am living in my truth and I acknowledge that I made mistakes in my personal credit past which is now affecting my credit building future. I seek to make amends and teach others what I have learned. Feel free to join the social community that I have created for anyone who wishes to document their journey and live in their truth. I will be here to support you as best as I can.

Even if we are the only people in the community I will do my best to share my knowledge with whoever seeks it. Thanks for reading my truth. It gets better from here!

5 Ways to Build Credit Effectively

5 Ways to Build Credit Effectively

Credit card holders are not just cardholders who buy and pay pieces of stuff. For some cardholders, they are setting a standard to follow to build a good credit history. While for others who are currently not able to control the idea of buying pieces of stuff.

As a responsible credit card holder, one must know that in every decision you make in buying something may result in either a positive or negative outcome. Which leaves a good or bad credit history.

Some of you may think that having a credit card is just all about expenses. It is partly true for some reasons, but If you get to think of it, a credit card is a huge help for those people who really know how to use it. It serves as backup support to every shorten or tighten the budget. Having a good credit history has !a positive effect in building credit.

There are some pointers you need to bear in your mind from time to time. It is not difficult to build good credit. First, only acquire what you can afford. This idea cannot only be applied to credit matters but also as a life goal to avoid excessive debt.

Only borrow what you know you can pay immediately in return when the deadline of payment arrives. To avoid hassle on your part as well as the creditors part. Same goes for loan and acquiring money from other people.

In this scenario, you might encounter different types of people that you can never imagine. I did not mean all of it but most people change the way they act when it comes to the monetary issue. If you borrow a tremendous amount of money or purchase a huge total amount without thinking if you can surely pay it off, then expect credit trouble and be in debt. No wise and responsible person wants to be in the idea of debt.

For some, debt is a word that no one can resist. When you hear it first, your reaction will change in the first place. Because it is a situation that you can never imagine.

When you practice charging only what you know you can afford, future creditors and lenders will let them know that you are a responsible and good borrower. In that way, you will find it very easy to establish new credit lines and tradelines.

You can totally show how well you know how to use it properly and only borrow what you can definitely payback. Before anything else, credit or loan, review first your monthly income to know how much money you are going to borrow. That you have an idea about what is your desired amount you are going to acquire.

As for loans, bear in your mind that some lending companies have a qualification per amount of money you can borrow from them. Do not get tricked by the idea of it. Even if they say that you are qualified for a specific amount which is higher than your amount, don’t settle for anything that they offer.

Keep in mind that you already review your income for a whole month and the amount of money you can afford to repay. Always settle for the excellent decision of yourself and not the sudden decision of others.

Second, if you have a credit card with a small amount of credit available, always use and settle for it. In that way, you will not overuse your credit card and reach its limit.

Let me tell you this thing, for example, if you have two or more credit cards with the credit limit of one thousand dollars ($1000), and the other one has a credit limit of seventy dollars ($70), and you are always using the higher credit limit card, your purchase might be higher in total amount also.

Unfortunately, in some cases, they always reached its credit limit and used the second card as a backup which is entirely a wrong practice in using a credit card. You are just putting yourself in debt. Do not max out your credit limits or getting even close to it. That is too irresponsible and don’t act like one.

If you wish to build a good credit score, keep your balance below thirty percent of your credit limit. Always aim to pay off your balances within a month. Do not max out your credit limit or borrow money if you don’t have any plan in paying it off within the month.

Lenders or creditors know that borrowers like you who max out your cards usually have adversity in repaying what you borrowed. Your credit score will suffer when you do not pay them off or simply by just having consecutive penalties. This will lead to having a bad credit so always be careful and review your income first.

Do not just drop into the decision making without having a hypothesis and a conclusion. Third, you always start with one credit. Nowadays, it is not too difficult to avail a credit card even the people who just started their work and passed on the six, months to one year contract.

These people are the one who only gets a credit card for the personal desire for something which they can afford to buy in cash, and this will lead them to debt. If you are just getting a credit card for luxurious items which you know in yourself you cannot afford, I don’t think you need one. Opening a new credit card is okay.

But as for the beginners, do not open too much credit card because the more you have a lot of it, the harder you can control yourself in buying something. It will also be difficult on your part to comply with the due date for credit card payments. Having a lot of inquiries into your credit and having numerous credit cards can affect your credit score.

Always make sure that before applying for new credit, you master already the habit being a responsible borrower and an on-time payer.
Fourth is you need to practice, again and again, the habit of paying your credit card in full.

Not half, not one fourth but full. If you are only purchasing something or charging what you know you can afford, then there would be no problem with that. As simple as that. But in reality, not all people have that mindset when it comes to credit card matters.

A lot of people are misusing it. Paying it off each month confirms that you can afford to pay your bill – something that lenders and creditors want to know about. Paying your balances on time is a plus for building a good credit since the most part of your credit score is about the timeliness of your payment.

So, you should always observe yourself of being eager in paying your balances, not just one, two or three times but still payback your balances in full at all times. Paying early is also a good plus point in building good credit.

Last but not least and I should say that it is also one of the critical things to keep in mind is that you need to let your accounts age. It will also have a positive and tremendous impact in building a good credit score. The longer you have your credit card with you, the better it is for your credit score to accumulate plus points. Leave your most old account open since it helps you inflate your credit age and build good credit.

In some situations, others want to rebuild their credit from a bankruptcy. To restore it, they have to be an authorized user of someone else’s credit card. To fulfill this, they have to ask their parent or a close family member to add them as an authorized user of their credit cards.

So, the payment history of the extended card will be added to the card owner’s credit report. Another option is opening a joint account with the family members. The family member will take a risk and extra step on this.

It is likely to be similar to the authorized user but with greater responsibility because, in the joint account, the two parties have agreed that they will pay the total amount accumulated legally. Both parties are to share with payments that are reported in the credit history. If the payments went well on time and did not have the delays, the weight of the credit score is higher than the authorized user which is a big boon for the rebuilder of the credit limit.

Now you already have an idea on how to build a good credit effectively, you really need to understand it fully. Having a good credit score makes your life more affordable. As a carrier of a good credit score, you can obtain a loan on the best terms.

If you reached a goal of a credit score with above seven hundred sixty, that means you have a higher possible chance for approval to obtain the lowest interest rate and agreeable terms. Having a low credit score does not entirely mean to haunt you forever. But the process of improving it may compare to a marathon but definitely not a sprint.

It really takes time to put it back in the usual. You have to be patient, cautious and severe enough if you are really aiming for it. It is not as easy as pie.
Building good credit is a positive thought for everyone.

Aside from having the lowest interest rate, it will also help you save money from the accumulated discount interest and make your life easy. That still depends on your strategy as an individual.

Are you a saver? Or are you the type of person that spends everything that you make? Do you practice good budgeting habits?

The less money you pay for the interest discounts you have for everything else – this thought will help you to save money. Other benefits of building a good credit score are: Getting approved for higher limits. This refers to the additional amount of your credit limit. The banks are willing to lend or borrow you more money because you have already proved that you repay what you borrow on time.

Now you already know how to build a good credit score and some benefits from it, you always make sure that you will be extra careful in your decisions to avoid getting into trouble. Careful decision making is necessary at all times. If you are planning to have a credit card or you already have one, make sure that you aim for a good credit score – this to avoid having bad credit.

Always be the wiser one that the troubled one. To avoid hassle in your life, do not let the influence of the society when it comes to popular products eats you up. Remember that it is okay to live a simple life. As long as you have a shelter to live by, food to eat up and primary needs for personal use is excellent.

Material things can wait. You can always strive for the best to attain the lifestyle you dream of. You can be totally happy if you first achieve your dream without having any debt.

After fulfilling those and you know in yourself that you are a hundred percent sure that you can afford to avail and payback a credit card or loans, then have one. Make sure to know your limit and control yourself. Always think of the pleasant and agreeable benefits of having a good credit score than being in the circumstances of rebuilding a credit which is not as easy as you think it is.

Allow yourself to think in numerous times to be sure about your decision. Smart thinking usually takes time, so allow yourself to think first before handing over your choice. Self-discipline is all about control and awareness. You can do it.

Four Common Forms of Credit

Four Common Forms of Credit

It is no wonder why borrowing money from someone is typical nowadays, it is because of the cost of living which absolutely get higher as time goes by.

Everyone wants assurance and guarantee when it comes with money. Because sometimes the comfortable you borrow money from someone or from bank companies, the harder you can pay it back until it reaches a high interest.

In that way, you are only causing trouble in your own life, and you are just making things difficult for yourself. Borrowing money from someone takes trust and patience.

As a lender, you need to trust the borrower that he or she will pay off the incurred debt at an agreed time. As a borrower, you need to settle your debt based on the agreement you and the lender have agreed.

Credit is a critical aspect of buying a home. A lender wants to make sure that a borrower will pay back the money. To determine that an individual is a good credit risk, a lender looks at four things, it is called the four C’s of credit – capital, capacity, credit history, and collateral.

Credit can be broken down in a couple of ways. One way is the amount of money you are approved to borrow from a lending institution. With this approval amount comes an agreement to repay. You’ll have charges to pay, and any additional fees that can or will be applied.

Credit can be classified as your borrowing reputation. It paints a realistic picture of your payment history and provides underwriters with proper information regarding the likelihood of your repayment.

Your credit is more than just a card sitting in your wallet. Credit cards can play a significant role in building and establishing your financial record.

Having a credit line extended to you means a bank believes you will give back the money you are borrowing to make a purchase. Lenders, in return, are paid interest as a percentage of your loan. Think of the interest you pay as paying for access to the credit.

Creating an accurate record of on-time payments can help you get lower interest rates. Particularly, when you finance a house, a car, a college education or smaller purchases such as new appliances.

A good credit score can have outstanding benefits. Like getting an apartment, signing up for utilities and even landing a job can all be affected by your credit history.

Landlords, utility companies and your potential employers may use your credit to figure out if you will be a responsible tenant, customer or employee.

If you develop bad credit history by making late payments or missing payments altogether, banks and other lenders will view you as a high risk. To protect their investment, they might charge you higher interest or not extend credit to you at all.

Make the absolute most out of your credit. Learn and understand your credit score and report. The sooner you can show discipline in your spending and keep careful control of your debt, the sooner you’ll have good credit.

The Four C’s of Credit


It refers to the amount of cash you have available is your capital. The more money you have in your savings account, bonds, certificates of deposit, IRA, or 401K.

Any other places where you have access to money quickly make a lender more comfortable. It will also show that you can cope with the financial emergencies that may occur after you move into your newly bought home.

If you have saved a capital, it shows the lender that you are able to manage and budget your own money. Lenders for home mortgages will ask how much money you have access to and where it came from.

This is an often called verification of deposit or income. You are required to show proof that you have enough capital to pay a down payment, loan fees, closing costs, escrow, and inspections.

Advance payments like those for property taxes, insurance, and moving expenses, lenders want to see that you have saved this money. They do, however, realize that this is difficult for low-income buyers. There are some loan programs which allow you to use your own savings money you received as a gift.


Your ability to make enough income to get the new mortgage is vital. You’ll need to make your loan payments and still pay all of your other living expenses is called your size.

Lenders want to see your ability to repay what you borrow. Lenders often calculate your capacity by looking at your current income, your income history and the amount you owe in debts.

Current Income

The lenders need to see that you and your spouse, if you are married, currently make enough to pay your new house payment and any other expenses – such as taxes and insurances, and still live comfortably.

A lender might be looking at your gross income, which is the amount you earn before taxes. This will include commissions, overtime pay, dividends and any other money that is a part of your regular paycheck.

Income History

Lenders may look at your employment history and your future earning potential. The lender will also ask if you can show that you already have held steady jobs and made a stable income for the past two years, how long have you kept your current position?

Is it likely that you will keep earning at your current rate of pay or better for the next two years? The lender will also ask you questions in connection with the verification of income & employment.

A lender may contact your past and current employers to verify how much amount of money you earn, and you are likely to continue working there for the next two years.

The amount you owe – A lender will look at all your current debts, such as monthly payments, charge cards, child support, etc.

Keep in mind, lenders don’t include certain types of monthly bills, such as telephone, utility bills, auto insurance, life insurance, retirement, and savings contributions.

Credit History

A lender wants to predict whether or not you will repay your debt accurately. A good indicator is how you have been with your prior obligations. If you have always re-paid the money you have borrowed on time, they will extend credit to you.

If you generally make cash purchases and use credit for larger purchases, emergencies, you are probably a good risk. But, if you have many loans, lines of credit, and credit cards but struggle to meet the minimum payments that are a bad sign. You may need to improve your creditworthiness before you apply for a mortgage loan.

A lender wants you to order a copy of your current credit report to learn about your credit history. Some people do not have a credit history because they have never used credit and they’ve never borrowed money. Even if you don’t have traditional credit, you may be able to get a loan for a home purchase.


Your property will be collateral or extra security for your loan. This is called a property lien. Did you know that you can use assets like a vehicle as collateral? Your lender will look at the value and condition of the asset. They want to make sure it is worth as much money as you are borrowing.

They also want to be sure that the house does not have any major repair problems that could potentially cost more money than you anticipated. Lenders determine value by hiring an appraiser. You may be asked to hire your own appraiser.

The appraiser uses his or her expertise to estimate the fair market value of a property. Every lender wants you to have “skin in the game.” This means that they want you to invest some of your own money. Banks will generally lend less than the fair market value.

The appraisal helps calculate the loan-to-value ratio, which helps lenders determine how much to lend and tells you how much of a down payment you will need. Lenders review the appraisal not just for value but also to make sure the house is in acceptable condition.

If the assessment shows that any significant parts of the house are not in good shape, the lender may agree to make the loan only if the element is fixed. This is called property condition contingency. It is a protection for you as well as the lenders.

Now that you already have the knowledge about what is a credit and its importance as well as the four Cs of credit, you also need to know what are the common types of credit.

There are three general categories of credit accounts that can impact your credit scores – these are revolving, open and installment.

Although having a variety of credit types can be useful to your credit health, it is not the most crucial factor in determining your score.

Your credit scores can make you feel a lot like grades in the school – and they kind of are.

Creditors use credit scores as a tool to assess your creditworthiness — i.e., whether you’re likely to pay credit issuers back if they give you money.

According to one of the significant credit-scoring modelers – which is FICO, credit scores are made up of five factors. (1) Payment history – 35% (2) Amount of debt owed – 30% (3) Age of credit history – 15% (4) New lines of credit – 10% (5) Credit mix – 10%

Revolving Credit

Revolving credit lines are one of the most common types of credit accounts. Revolving credit is a line of credit that you can borrow from freely but that has a cap, known as a credit limit.

This cap represents how much can be used at any given time. It typically refers to credit cards and home equity lines of credit (HELOCs). And it usually requires monthly payments and interest charges if you carry a balance.

If you have a revolving account, the creditor has approved you for a set amount. That fixed amount represents your credit limit. You can access your credit line whenever you want and as often as you like.

In return, you must pay the creditor a minimum amount on your account’s outstanding balance every month. Credit cards and home equity lines of credit are examples of revolving credit.

This form of credit allows you to spend up to a certain amount. The lender sets your credit limit, or the most you can use.

In revolving credit, the borrower rotates the balance by carrying it forward from month to month until it is paid in full. Interest charges typically occur for any revolving balance.

As the money is repaid, the difference between the maximum credit limit and the current balance is available to still be borrowed.

This is the most common form of a credit issued by credit cards, such as Visa, MasterCard, and store and gas cards. Credit cards are considered unsecured credit because there is no collateral securing the money borrowed.

Charge Cards

This form of credit is often mistaken to be the same as a revolving credit card. However, the significant difference between a credit card and a charge card is the credit card can carry a balance, whereas the charge card must be paid in full each month.

If the balance is not paid on time and in full, penalty fees will be added.

American Express is an example of a well-known charge card. This form of credit is advantageous against accumulating credit card debt.

A charge card actually works as a type of credit card that requires you to pay your balance in full at the end of each billing cycle, rather than to make monthly minimum payments on the balance over several months.

Charge cards force you to be responsible with your spending because you have to pay your balance off at the end of each and every month. Charge cards also allow users to make purchases which can then be paid at a later time.

However, charge cardholders must pay back the entire amount they borrow each month upon the due date. If they fail to do so, they are subject to substantial fees and can even potentially lose their charge card.

One of the most critical features of charge cards is that they have no preset spending limit. This means that there is no hard limit placed on how much money a user can spend on credit, or “borrow” from their credit card company.

There are four main differences between charge cards and credit cards, and they are between their payment terms, spending limits, annual fees, and options available. Whether a charge card or a credit card is better for you depends on how confident you are in your ability to pay off your entire balance regularly.

Payments are due on time (or the flip side – whether you need external pressure to force yourself to be responsible with credit), how regular your spending habits are from month to month, and whether you’re okay with a limited choice you have to pay for each year. Charge cards are best for individuals who have the means to pay off their credit balance every month.

They are generally more expensive than most credit cards, but for that charge card holders enjoy some added benefits, such as having no preset spending limit, or access to American Express’s Membership Rewards program.

This last point allows charge card users to make big purchases, without having to worry about hitting the same limit month to month. Charge card issuers will generally work with the cardholder to allow the consumer to make purchases which the banks think can be paid back.

Another way of looking at this is: because charge cards have to be paid off in full each month or else assess penalty fees, some cardholders find this to be an excellent way to instill financial discipline and force themselves only to buy things on credit that they can reasonably pay off.

Because you do not have to pay off your balance each month, using a credit card has the potential to lead to some poor financial management. Charge cards train users to develop behavior that is conducive to good budget management.

Failure to pay off the balance due on a charge card has harsher consequences, however, that are seen with credit cards. Charge card users may see more damage done to a credit score and higher penalties for missing a payment, than if he or she had applied for a credit card instead.

Installment Credit

Installment credit involves a set amount borrowed, a fixed monthly payment and a fixed timeframe of repayment.

Interest charges are pre-determined and calculated into the set monthly payments. Common forms of installment credit agreements are home mortgages and auto loans.

With installment credit, you borrow a certain amount of money for a set period of time, and you repay the money by making a series of fixed or installment payments. Examples of installment credit include mortgages, car loans, and student loans.

Installment credit is also typically secure. Secure credit requires security for the lender. The borrower must provide collateral, something of value pledge to guarantee loan repayment. If the borrower fails to repay or defaults on loan, the lender may confiscate the collateral.

A home is an example of insurance on a mortgage, and a vehicle on an auto loan. If the borrower were to default, the house or car would be repossessed.

Revolving credit is when a lender extends credit to you that remains the same amount month over month. You’re free to use as much or as little of that credit line as you wish on any purchase you might make with cash. At the end of each month, you’re sent a bill for the balance. If you don’t pay it off in full, you pay interest on the remainder.

Revolving credit can help you manage expenses before your next paycheck arrives. Plus, using rewards credit cards on purchases you have to make anyway is a great way to put money back in your pocket. Just make sure you’re doing it right:

• Keep balances low. With a credit card or other types of credit, you’re able to use up to 100 percent of the credit extended to you. But that doesn’t mean you should. Maxing out your credit will lower your credit score. Keep balances low throughout the month – ideally, under 30 percent utilization – to ensure you maintain healthy credit utilization ratio.

• Pay off balances every month. A first-time late payment on your credit card can result in a fee as high as $27. Plus, some issuers will raise your annual percentage rate on future purchases as a penalty. The worst consequence, however, is a potentially severe drop in your credit score. Staying on top of your bills is the safest thing you can do to maintain good credit.

• Avoid too many applications for revolving credit. Before applying for a credit card or other type of credit, be sure your credit score is in good shape to avoid being rejected. And if you are approved, space out future applications to avoid a ding to your credit score.
Revolving credit can be a useful tool or a drag on your credit score, depending on how you use it.

If you’re a responsible spender and pay your bills on time, you should be able to use credit to your advantage while also building a good credit score. Now that’s a win-win.

Non-Installment and Service Credit

This form of credit allows the borrower to pay for a service, membership, etc. at a later date.

Generally, payment is due the month following the service, and unpaid balances will incur a fee, interest, and/or penalty charges. Continued non-payment will result in service cancellation and can be reported to the credit bureau, affecting your credit score.

Service or non-installment agreements are widespread in our everyday life. Cell phone, gas, and electricity, water and garbage are all examples of service credit. A non-installment credit is a kind of credit which is paid in lump sum and not through installments.

It is the most straightforward form of credit which an individual may acquire. It may be unsecured or secured with any personal or real property of the borrower.

It is usually payable in a short period of time and failure to settle the obligation within the said period may lead to penalties and interest charges. There are two kinds of non-installment credit – the secured one and unsecured.

A secured credit card is often recommended for consumers who have trouble getting a traditional credit card – consumers who haven’t yet established a credit history or who have damaged credit.

A secured credit card is very much like a regular credit card, but the significant difference is that you’re required to make a deposit against the card’s credit limit. Your credit limit will usually be a percentage of your security deposit, or it may be the same as your deposit.

Many banks place your deposit into an interest-bearing savings account where it stays until you close your account, upgrade to an unsecured credit card or default on your credit card balance.

Unsecured credit cards are the most common type of credit cards. They are not secured by collateral. That means that unlike secured loans, such as mortgages or auto loans, unsecured credit cards are not directly connected to property that a lender can seize of the cardholder fails to pay. Unsecured credit cards are the most common type of credit cards.

They are not secured by collateral. That means that unlike secured loans, such as mortgages or auto loans, unsecured credit cards are not directly connected to property that a lender can seize of the cardholder fails to pay. Issuers of unsecured cards must make use of other means – such as the courts or garnishment – to collect unpaid debts. Customers qualify for unsecured cards based on their credit history, their financial strength, and their earnings potential.

Keeping your debt levels low (especially credit card debt) and paying off your accounts on time are essential steps you can take to help your credit scores. Having a healthy mix of credit, such as revolving and installment credit, can also improve your credit scores.

Staying on top of your payments regardless of credit type can help show lenders that you can responsibly handle various types of credit. A credit card can make impulse buying easy, but be careful you don’t overdo it. Try to pay as much off your balance each month as you can and don’t just pay the minimum. This will reduce how much interest you pay.

I hope that this article clearly explains and helps you understand the four common types of credit and differences. Always remember that only charge products or services that you only afford to pay when the due date comes.

There are more types of credit that we have not covered here. We haven’t touched on corporate credit, vendor credit, or store credit cards. These credit lines can come in handy when you shop at a certain store very often.

9 Easy Ways To Establish Business Credibility

9 Easy Ways To Establish Business Credibility

It is popular opinion that to be successful in your life or make your financial lifestyle more comfortable, one must enter the world of business. You should establish a company while you are still working even still if it is as small as a startup.

Most of the employees who are employed for numerous years, says that working an everyday job won’t make you a wealthy human being. Starting a business is something that will make your life change.

They say that they are working to survive for a day, to provide primary needs like food, shelter, clothes, etc. They do not have the extra money to deposit on the bank to have it as their savings and for emergency purposes.

They work to pay expenses like tuition fees at the school, electricity and water bills, credit lines, car loans, and even house rentals.

Some extraordinary people do not hesitate to be in the line of business while they are still working. It is an additional source of income that is a big help for them and their family members. It only needs an effort and an extra time to control the flow of your chosen business.

Having a business, either small or big, at an early stage of your life is an advantage for you as a young adult. You can save more money in your bank account compared to the people who only have their business because they needed to and because of the money shortage. Being in the world of business is not that easy.

You do not just think of your business name, getting permits and thinking of what product you need to sell. You always need to think about what products do the consumers want or might fit in their taste for the business to be successful in the future. On the other hand, as an owner of the company, you help those people who are jobless or in need of jobs because you need manpower.

You also help the country’s economy rate. In any business, you need other people’s help to run a business. You need to hire people who are qualified for your requirements.

As a business owner, you create job opportunities because you need people to produce and sell goods and services to consumers. Did you know that almost everything you use in your life was generated by a business? Basically, without these businesses, it would be tough for us to provide the things we need.

That’s why business has been part of our lives from the very start up to the present. Above are the easy ways to establish business credibility and its explanation to further understand for everyone who plans to start a business.

First, choose your business name. In putting up a business, you need to think of a unique and catchy business name. So that people will catch its attention or simply enthrall. It should be unique and not easy to forget.

Keep in mind that you do not need to make it complicated. Having a catchy yet straightforward business name would be fine. It also needs to have some sense and sometimes, you need to give a clue about it.

Creating a business name also requires to have an easy pronunciation and spelling. Forget about made-up words and such non-sense phrases. Refrain from choosing a business name that would not allow your business to expand around or add to its product line.

Lastly, your business name should be available. It should be the same with your internet domain. So check out your chosen name with your Secretary of State Incorporation site, Network Solutions for the area and the U.S. Patent Office for the trademarks.

Second, purchase a virtual office. Some businesses need to have a flexible working hour. Buying and having a virtual office build an opportunity for people to work whenever they like whenever they are.

With a virtual office, you do not need to commute to work. You can use your extra time relaxing before working, and with that being said, your productivity will increase, and you can be more focus on your work. Providing virtual offices can help you communicate more with your employees because they are easily more active.

It gives you also the opportunity to have some ample time with your family. For example, your children want to eat outside. Don’t worry it’s not a big deal. You can start working in the afternoon – even without having a shower!

Third, establish a legal entity like a corporation or LLC. No other legal entity will work for building business credit or for creating business credibility. The principal reason for constructing a corporation is to limit the liability of the owner. You cannot do that with a sole proprietorship or partnership. With either of those legal entities, the owners are personally liable for the debts and liabilities of the business.

Most of the business owner’s create and form a corporation to protect themselves against legal and financial liabilities. It separates merely your business dealings, assets and bank accounts from your personal assets.

Fourth, get a business phone. Telephone system plays a vital role in most businesses, especially in modern enterprises. Valuing real-time communication regarding a business relationship is essential.

Given the fact that sending a colleague or a client a text message or an email is a natural thing, these form of communication do not carry the same weight as a regular phone call. It is also essential to have a local number, a toll-free number, and fax numbers. Your telephone numbers should be in a 411 listing for secure communication, reaching out and access. It is a white pages directory that contains telephone numbers, addresses, people and more.

Fifth, purchase a domain name and corresponding email address. Buying a domain is the first step to your online identity – show the world who you are! It can also be the most memorable way to find you. Help your customers and visitors find you by registering something catchy and short.

You can also try some latest trend by discarding the letter to make them shorter and more memorable – Flickr is the best example for this. The domain name is also the keyword that explains who you are and what you do, it is also the next call of action that your users will follow. Having a domain name is the first step before building your website and professional email address.

Lastly, it is the best technique to secure and protect your brand online. Domain names are not just simple names, they are as essential as your business name. It is your key to the online world. You need to choose your domain name with care.

While a professional email address can be used for intra-company communication, marketing purposes, dealing, and communication with business partners. Emails are proven to deliver extremely fast compared to a traditional post. Having an email address is important because it is one of the means of communication nowadays. It is essential because it creates a fast and reliable form of communication that is totally free and accessible.

Sixth, get an EIN or employer identification number. EIN or simple Employers Identification Number refers to a nine-digit number assigned by the IRS. It is used to identify the tax accounts of the employers.

The importance of having an Employers Identification Number is to let you open a checking account and apply for credit apart from your personal account and enables you to partner with another businessman, made You also need an EIN when you hire an employee – even if it is only one.

Seventh, get a business license.

A business license is a permit issued by the government that allows companies or individuals to conduct business within only the local’s geographical jurisdiction. Having a business license means telling the community that you take business seriously. It boosts credibility and allows the entrepreneur to apply for citywide funding.

The business license also ensures the financial health of the young company to be in good standing. The business license is also known as an authorization to start a business issued by the local government. In the fields of business, it is mandatory to have a business license before you can begin operating your business legally. You need to put all the permits and licenses in place first.

Eight, set up a business bank account. In any business, it needs a system to manage its money. A business accounts are used to track the cash balance, money owed to the creditors, money owed to the business and payrolls paid to employees.

It is universal for all business around the world. Some of you might be wondering if setting up a bank account for business is necessary? The answer is yes. Especially when your company is in a separate legal entity. The business fund must be in a separate bank account.

It is also essential to keep track of cash flow. Having a business bank account is vital as it serves not only a means of financial representation and identification but also provides a safe place for you to keep your money.

It will also give more benefits to your business to assist in your venture shortly.

Lastly, purchase merchant services.

Merchant services or also known as the credit card processing is the handling of electronic payment transaction for merchants. It is also authorized financial services that allow accepting credit cards or debit cards transaction using online ordering or point of sales systems. This is also a big help to your business.

You need to consider that not all the consumers practice having money in their wallets always. Sometimes, they prefer to use their cards when shopping, eating in restaurants and buying online. Purchasing a merchant service depends on the kind of business do you have and how small or big it is.

This article clearly shows you step by step ways on how to establish business credibility. It is always important to follow legal rules and steps when opening or starting up a new business. You also need to keep in mind that all legitimate business is not easy to build, so you have to make your decisions wisely.

You might consider having a partnership with your trusted colleague or family member when you feel and when you think you need extra help from others. Always make sure that before starting up a business, you must, and you need to keep everything in place and in order – most especially in legal. Having a company is essential regardless of your age.

All are equal concerning business. You need to be unique and creative to be a successful one. Consumers are always looking for something new in their sights and their taste.

In a business start-up, turning your hobby into a business is also a good thing because doing what makes you happy and enjoy is a plus in your store. Remember that you will be going to spend more extra hours when you have a business, so you need to find yourself enjoying the things that you are going to do. In the store, you have to be approachable, and if possible, you have to smile as often as it is.

You should always treat your customers right regardless of hunger and tiredness because if you see a customer is happy and satisfied with your service that means more than sales. It is an achievement, satisfaction. A happy customer will bring more customers and repeat business.

Putting up your business does not always mean that everyone will like it and everyone will buy it. Still be ready for unexpected things. It is a matter of competition for all the business owners.

So keep in mind that being unique, being creative and having originality will help your business to be an attention seeker to the consumers plus always remember to treat all the people around you with pure kindness no matter who are they.

A customer or a business owner, it doesn’t really matter. Having new friends or building a friendship with anyone could be count as one of your real success in life.

How My Credit Score Grew Over Time


I’m no pro, however, with intensive research, I was able to find affordable ways to repair my credit. If you don’t know it could cost about $600-900 dollars to repair your credit, not to include the number of negative accounts and remarks you have that can easily double the price.

Unexpected credit repair cost would be things like credit monitoring that can range from $25-50 per month. There are many tools available to us to fix our credit ourselves, however, this information is not easily accessible. This process can take a minimum of 3 months to start reflecting on your credit report.

Get credit monitoring

To start you will need to know what your credit score is and what the creditors have been reporting. Credit monitoring companies offer a menu of services, from simple alerts asking if you made a certain credit card charge to notifications that a crime may have been committed in your name. You will need to analysis your report monthly to know what changes and who is reporting positively or negatively to your report.

Discover what accounts can be negotiated by paying before account being closed

you need to be prepared for the possibility that your credit card company may not be willing to entertain or negotiate a credit card debt settlement.  In some situations, it’s far easier to rebuild your personal credit by negotiating with your creditors about closed accounts.

For example, I call one of my creditors “ Capital one” they had closed one of my accounts. The first thing I did was call them and talk about the situation at hand. Please be mindful most creditors are more forgiving if the situation is due to not receiving statements, moving and having a new address. Once I explained this to them. I was able to pay the owed balance within 28 days from that conversation.

In return they would report the account had been close but it was paid in full. One thing you must remember is to get everything in writing. So at the end of the agreement, I asked them to fax that to me in writing. Why is this important, often times you have no clue as to whom you are talking to or dealing with. I had to secure that they would report the transaction correctly.

With credit, you will learn fast that everything must be documented for proof in case they don’t report to the credit bureaus.   It is probably going to be a frustrating experience that will require long conversations with multiple people over days or weeks.

Don’t bother to pay collection accounts

you can dispute the collection items with the credit bureaus (online), however by paper works best. This identifies you oppose the doing it online where to the credit bureaus you’re going to have to undergo many identity verifications. Once you start the disputing letters you will find the creditors mailing you everything except what they should be mailing you.

If the debt collection agency does not respond with proof of the debt in 30 days, then the item would be removed. Dealing with a debt collection agency can be painful. The phone never stops ringing, and they won’t stop asking for money.

Agencies have a reputation for pushing the boundaries of the law, using aggressive (and sometimes illegal) tactics, and bending the law to pressure people into making payments. The odd thing is when you start disputing and reaching out you won’t get a signed copy of the contract, which means they have to remove the charges from your credit.

Do some good research for dispute letters

A credit dispute letter is a document you can send to the credit bureaus to point out inaccuracies on your credit reports and to request the removal of the errors. In the letter, you can explain why you believe the items are inaccurate and provide any supporting documents.

This brings me back to my first point having credit monitoring. If you don’t have the credit monitoring then you will not be able to correctly dispute the negative marks on your credit. Not just invalid charges. Most creditors will report to 1 or 2 credit bureaus and not the other. Why is this a big matter, simply because your credit score would be higher if they all reported your on-time payment to all 3 credit bureaus.

Next, another way creditors get over is they report you made an on-time payment to 1 credit bureaus and report you made a late payment to the other 2 credit bureaus. This is a red flag that you wouldn’t know was incorrect. We are supposed to dispute these happenings but we won’t know unless you get your credit report once a month.

Let the credit games begin

It may take the credit bureaus anywhere from 15-30 days to respond to your dispute letters and believe me, they will not be the responses that you were hoping for. They are going to send you everything except what you’ve requested. Which is why you must stay on task and send your credit rounds on time. Around your 3rd round, you should actually receive mail about the accounts your disputing.

This is when it gets really fun. The credit bureaus are going to attempt to send you a letter to stop mailing them and mail the creditors, however, if you contact the creditors they will then say they have spoken and been in contact with you which would make the dispute disappear. Secondly, keeping disputing even when you start receiving mail from the creditors just done respond to them at all.

Creditors and the credit bureaus will try to scare you

The creditors will send you copies of transactions, however, if they have not mailed you a signed contract with terms and agreements there is no need to be fearful they are trying to get you to at least pay something on the closed accounts. The only thing you should be doing is disputing the accounts.

They will also continue to contact you if you have many accounts its best to change your number NOW, if you do not have that many to dispute then no need to change your number, however it’s recommended that you at least change your number every 2-3 years. Once you speak with one of your creditors its over, they got you! Do not respond or correspond to them.


Creditors play by many rules and it’s important that we know them to defend our credit. Once you are able to identify what your credit needs you will then be able to fight the good fight. You will only need a few tools; printer, stamps, computer, and This is a great place to discover dispute letters and gain knowledge about the DIY credit repairing process.

Looking back I wish credit was a course required in school. You’re going to use and need credit in your lifetime. I believe the solution to this problem has now been solved. Most of the learning about credit happens when you ruin it and it shouldn’t be that way. This is how many Americans get in credit debt the trial and error movement. We aim to stop this trend. When you know better you will be able to do better.

Credit Repair Is The Devil

Credit Repair is the Devil

Credit repair is the devil. Let me explain. In all, I have been in credit disputes for 1 year now. Yes, things have slowly started to get updated and/or removed. However, it takes 45-50 days just to get a stall letter from the bureaus. They do not actually care about the accuracy of your credit report. They have no sense of urgency. Only you care about your credit report.

They have so many stall tactics that you would think they are an insurance company holding out on paying you your benefit which you are entitled too! Maybe they are. Perhaps credit bureaus are insurance companies for the banks. they sure act like it. There is no incentive for the credit bureaus to actually ensure that your credit is accurate. they know for a fact that 98% of people will not pursue litigation. Did you know that you can win up to $1,000 per inaccuracy on your credit report?

I know that when I sue them I’d be over $50,000 richer. That’s right there are 50 inaccuracies on my credit report. I did not put the information in my own credit file. Someone had to submit my account information to the 3 major bureaus like that. In 1 years time, I have had 5 responses from the major credit bureaus.

I can easily forget a lot of things in 50 days just like anyone else. On top of forgetting, it’s possible that I do not even remember which account I was disputing so I have had to keep a record. Since I hired a professional I no longer have to carry the burden but it sure does require a lot of patience to dispute inaccuracies on your credit report alone.

Companies charge a hefty fee for credit repair services as well and you are not guaranteed any results. They have no clue how good or bad it will go. The only thing they have over you is they’ve done it longer so they may have seen it work several times. I have personally seen it work but not to a degree that I was comfortable with. It certainly did not fix everything for me in the time I did spend disputing inaccuracies.

Credit Repair is the Devil because of the Credit Bureaus

I don’t want this to come off as one long complaint so allow me to state only facts. The credit bureaus can choose to not investigate your inaccuracies. They can say they verified all of the information without giving you any proof. They can and will stall you for months by playing the silent patient game. I know I said this a few times but imaging waiting a year and nothing has changed? Would you give up? They are counting on it!

The bureaus also lie. They’ll tell you to dispute the inaccuracies with the company you got the accounts from. What if those companies merged? What if those companies went out of business? It happens all of the time. They still will not remove the harmful information from your credit report.

I kid you not all these credit repair companies do is send out letters. Anyone can send out a letter but they charge you over $100 a month to do it. On top of that, the bureaus only respond every 45-50 days so they are going weeks without doing any work. However, the price is the price. How much is good credit worth to you? How much is being able to purchase property worth to you? That’s exactly what they will ask you right before they tell you how much their service cost.

Sure it is a valuable service but learning to DIY might be for you if you absolutely cannot afford the ridiculous prices they want you to pay. There is not negotiating with them on price either. The longer they’ve been doing the more charge typically. There are reviews online of people shelling out 1000s and getting no results. There are also success stories that “changed peoples lives”.

I can’t speak to a success story just yet. Personally speaking,  this is my first time hiring a professional credit repair company. The results are still pending. So far I have no complaints. I will refer anyone to this company should it prove to be a successful project. Until then I will refrain from mentioning their name. If you know any good credit repair companies please join my website and share their information with users who can benefit from credit repair.

Beware of credit repair hackers. Though I have heard mixed reviews, so you don’t hire shady characters and expect any good to happen. Especially if you pay them before you get any service. Be mindful that there are some credit repair techniques that have put people in jail! Most anybody will accept you forking over some money. Most won’t hold up their end of the bargain.

Don’t be Fooled into Thinking that Credit Repair is Fast; It’s Very Slow

There is a reason everyone can’t be a bank teller. You can’t trust most people around the main resource that can get them almost any resource. There is a right way and a wrong way when it comes to credit repair. Ethics go out the window when pressure is put on people to perform. They resort to shady tactics and it only hurt you.

In credit repair, you give your social security number up, your driver license or state issued ID number. You may want to carefully consider who you are giving this information too. If credit bureaus, banks, and other lending institutions buy and sell your information what would a regular human being do? Perhaps use it to their benefit.

You must be careful when performing any credit repair and when transferring your private information over the internet. This applies in person also but at least you have a face to match it up with. Online there is you and a screen. This is yet another reason why you need to have credit monitoring. If you know that any company or person has access to your SSN, state issued ID, and address, and phone number. They have everything they need to perform identity theft on you.

If you haven’t heard any identity theft horror stories I suggest you go and do a google or youtube search. Real people have had their lives ruined. Their life savings and investments taken. This is a very real issue and it can happen to anyone at any time. Especially if you have ever bought something online or using your mobile device.

If you are reading this I thank you for your readership. I feel like I am pouring my heart into every word. I just don’t wish my personal situation on anybody. If you think this life experience of mine applies to you in any way please join the community I created for you. It’s totally private. Its only for people in credit repair, credit dispute, and people building their credit. I just wanted to help people build and rebuild their personal credit.

If you feel so compelled please share this with someone. Cheer them up by letting them know they are not alone. I am here for anyone who needs my expertise. Thanks, again.

What is the best way to pay off credit card debt?

What is the best way to pay off credit card debt?

Almost everyone has their own debt, but having too much debt might cause problems emotionally, physically and financially. Debt is a total problem when you have it. Whether it is in cash or on the credit card. Sometimes, we cannot avoid debt due to money shortage.

That’s why we need to have a proper spending plan or an additional source of income. If we are able to have an additional source of income or a small business, we can avoid having debt. Debt refers to a borrowed or owed money from someone or from a bank company that has a due payment or an agreement.

Somehow, it is used by an individual or many corporations as a method of making large purchases for expansion or for starting a business that they could not afford under normal circumstances. When you borrow or owe money to someone or from bank companies, you should be responsible enough to pay it off because it is your duty and your obligation as a borrower.

Standing in a debt situation can be disturbing and alarming one because that means you are not able to plan your future correctly. You cannot plan your future because there is a debt that you need to keep in mind and pay it off. Imagine that if you are a common employee who only works for a living, how can you manage to pay your debt from someone if your salary is only enough for you and your family needs?

Having a debt or putting yourself in a crucial debt situation might also affect your credit rating, either a personal credit score or business credit score which can affect your lifestyle. Aside from hitting a below credit score, there are a lot of disadvantages that you can experience from having a debt. Sometimes, it is the main root of family misunderstanding.

That’s why it is not a good idea to borrow if you cannot pay it off on time, especially to a family member. Borrowing from a bank is quite difficult because if you are not able to pay it on the agreed time, the interest rate will inflate, and you cannot pat it off easily. The most common debt people have is the credit card, because it is the easiest one to have.

Having a credit card means you have the responsibility of paying what you charge after purchasing goods and services. A credit card can help you in many ways and it allows you to “buy now, pay later.” When you are not able to pay your credit card balances for a month, chances are you might start having difficulties in paying off your credit card.

Everyone wants to pay off their credit card debts. There are simple ways on how to pay off your credit card balances fast and easy.

First, pay the credit card with the highest interest rate first.

Lend any other additional money you have every month in paying off your highest interest rate card, while still paying your other cards that have a minimum interest rate. Once you are already finished paying your credit card with the highest interest rate, start paying the next credit card with the second highest interest rate and continue paying your other cards with a minimum interest rate.

Each time you pay off a card, you will only leave a little extra cash every month which you can invest in the next credit card that you are still paying off, creating a positive snowball effect. Paying off the highest interest rate credit card is the best way to eliminate your credit card debt and reduce your monthly interest rate. This way is also the way to regain and rebuild your credit score rating.

Second, do not use credit cards for a while. For the meantime, use only your cash in your hand. In that way, you will automatically spend less than using your credit card.

If you will continue using your credit card while paying off your remaining balance in your credit card, you will only sabotage your own effort. Third, get organized. Make a spreadsheet that has the content of your remaining credit cards and its debt including the interest rate for each credit card.

In this way, you will get to know your total amount off the debt you need to pay off and start planning on how you can pay each debt. You would not be able to tackle a problem if you do not know what you are dealing with.

Fourth, you have to set a budget.

Making a budget is a very helpful and effective way to have extra savings even if it’s not a big one. This extra money you have can help you in paying off your remaining debt. Make a room for spending less on your lifestyle and activities you are normally doing.

In that way, you will only need to spend on the things you only need and that is very important to you. Do everything you need to do for the sake of reducing your spending.

Fifth, request for a lower interest rate.

Call each credit card company that you have and ask for lower interest rates. Lower interest rates mean lower monthly payments and fees. So, every payment you do will pay off more of the principal.

Sixth, do everything you can to pay at least two minimum payment each month. Making two minimum payments each month can be the key for you to live a rent-free in no time. Each time you make a payment, your average daily balance is reduced, which can result in lower interest charges.

In this way, this will result in paying off debt at a much faster speed and can also help your credit score to boost.  Lastly, do not ever think of closing your credit cards. While it seems like to be a good idea after paying it off, this is not actually the best route to engage.

Because your credit score is based partly on your credit utilization ratio. It is calculated based on the amount of credit you are using versus the total amount of credit in your name. Once you close your credit card, there is less credit in your name.

This means that your debt utilization ratio will increase which will hurt you in the end and your credit score big time. It is also important to maintain a long length of your credit history, so keeping your card open will help you improve your credit score too.

It is very important to carefully choose your pay off strategy. There is two common credit card pay off strategies which you can apply.

First is to plow all your extra cash into the highest interest card while paying all minimum on the others – which is also the fastest way to get rid of your debt.

The second strategy is to pay off your credit card with the lowest balance first and continue to pay the minimums on the others. Though this is not the most effective way to eliminate your debt, it is the fastest way to reduce your debt on a single card. You need to always be motivated in getting rid of your debt, so you will be able to enjoy your cash in buying your own house, your one car, going to a vacation, travel more to other countries and explore.

You need to stay focused if you want your debt to eliminate as soon as possible. Using a credit card for groceries, gas and any other purchases is a convenient way to pay if you are short on cash. If you are not paying your debt in full payment each month, it does not take long for a credit card debt to add up and paying off a large amount of balance can really take a couple of months or even years.

The next time you are tempted to pull out the plastic, consider the numerous disadvantages of credit card debt. Some disadvantages of credit card debt are interest and fees, impact on your credit score, impact on goals and long-term consequences. Credit card debt can include a big interest rate and a large amount of fees.

The more you must pay in the interest and finance charges, the harder for you to get your way out of debt. On top of the interest, you may have to pay fees for cash advances, late payments, balance transfers, and annual card membership. Your credit score is really an important thing.

It gives the lenders the idea of how well you manage your money. If you owe a lot of credit card debt, it can hurt your score big time. If you have a bad credit score rating, you will not get approved for a new loan or lines of credit.

If a big chunk of your income is going to your debt repayment every month, it is harder for you to save and work toward your other financial goals. The longer you stay in debt, the longer you may have to defer your dreams of owning a new house or saving up as much as you can for your retirement. It seems that a credit card can often be a bad reputation, but the truth is it is your personal financial key when you use it responsibly.

It is successful when you use it correctly. It always depends on the person who is using it. Since a credit card is very easy to use, it is also easy to overspend. So, be responsible enough and learn how to say no to a lot of temptations in using and having your credit card.

A lot of methods and ways are stated above and all are very helpful in getting rid of and paying off your credit card debt. In addition to that, there is a method called the “Debt Snowball Method.”

This method explains that you start paying off your credit card debt from smallest to largest regardless of the interest rates. First, you need to put extra effort to eliminate the smallest balance you have in your credit card.

Next, you need to pay off continuously the second smallest and continue paying off the other minimums. Keep at it until you have crossed off every single item in your list and you are rent-free. Easy as pie, right? You only need to work for it and you only need to earn extra cash by doubling your working hours, have an additional business or even selling the other stuff that you are not using anymore. Do whatever it takes.

Paying off your debt is a total accomplishment for you as an individual. Being debt-free can make your life easier and you can sleep overnight anytime you want without having a lot of thoughts running through your mind. This article explains how to get rid of your debt easily and not in a harsh way.

This can help you on your way out of debt because no one wants to be in debt forever. Next time you purchase or charge something in your credit card, always be careful and think twice if that is something important. It is not a bad idea if you want to buy something you like for yourself but do keep in mind that you do not need to overspend for something.

Use your credit card wisely so you will not have a problem in the future and you will be able to make a room for savings. Budgeting is also one of the helpful ways in the correct usage of money. You need to control yourself in every decision that you are up to because it is always you who will suffer or be successful in the end, not someone else but you.

I hope this article helps you with how to handle credit card debt and helps you understand how to pay off your credit card for future use and knowledge.

Building Credit The Old Fashioned Way

Credit building the old fashioned way

Person Holding White Paper and Typewriter

Credit building the old fashioned way is not fun. It cannot be built overnight. Sure there may be some shortcuts but you cannot cheat time, level of debt, & credit utilization. Age of credit is a determining factor to underwriters. Your debt ratio is also a determining factor for lenders. If you found this blog post in hopes that you were going to get instant gratification, sorry to disappoint.

There are five major factors that influence your credit score: payment history (35%), level of debt/credit utilization (30%), the age of credit (15%), mix of credit (10%), and credit inquiries (10%). This makes up your entire credit scoring profile.

There are 3 major credit bureaus. Here are the names of the credit bureaus Trans Union, Experian, and Equifax. These are the companies you will be building credit with. Learn their addresses so that you can dispute any inaccuracies with them in writing.

Credit Monitoring

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Credit monitoring is very important. It is so important that companies not only monitor your credit but they monitor your identity as a whole. Monitoring your credit from the start of this process will ensure that you stay on track and build a healthy credit score.

When you choose credit monitoring only choose ones that give you all three major credit bureau reports and scores. This is an additional monthly payment. For a good one, it’ll be $29.99 per month. Consider keeping credit monitoring for the life of having and maintaining a credit score.

You will want to check the accuracy of your credit report every single month. You will want to dispute any inaccuracy that you see. Credit monitoring for Equifax, Experian, and Trans Union is vital to building credit. This entire process hinges on you being knowledgeable and aware of your credit report and score.

As you may know, credit is easy to obtain and very easy to ruin. So long as you have the money, in some instances as little as $300, you can establish a secured revolving account with a bank. Using the economy of scale if you got 8 brand new revolving accounts, all secured with your money and with $500 per account. You’d spend $4,000 dollars.

In order to get any credit account you have to submit your information and what is called a hard inquiry is performed. It is recommended that you don’t get more than 2 inquiries in a years time. Using this method it will take you 5 years to get 10 different credit accounts. This method is the one that gets shortcut the most.

What Is a Hard Inquiry?

You’ve heard hard inquiries are bad for your credit, but what exactly does that mean?

A hard inquiry (also known as a hard pull) occurs whenever a person applies for credit and the financial institution needs to review that person’s credit history.

Credit card companies use hard inquiries to determine whether to approve an applicant and how big of a credit limit to give their account. Other financial institutions use hard pulls to help determine the interest rate on home, auto, and student loans.

When a financial institution makes a hard inquiry, it usually only pulls the credit report from one of the three credit bureaus. In rare cases, the bank will make a hard inquiry with all three credit bureaus. Hard inquiries can negatively impact your credit score temporarily.

You can get lots of inquiries and simply dispute them. The ones that did not result in an account being granted to you will be removed. However, disputing is a different topic for another day. Keep in mind when building credit you will want to keep your inquiries low. Companies view inquires as “seeking credit”. Too many, and they think that you are a high risk or are in some sort of financial stress and thus will not grant you credit.

What is credit utilization?

Credit utilization is the ratio of your credit card balances to credit limits. It measures the amount of your credit limit that’s being used. For example, if your balance is $300 and your credit limit is $1,000, then your credit utilization for that credit card is 30%.

To calculate your credit utilization simply divide your credit card balance by your credit limit then multiply by 100. The lower your credit utilization, the better. A low credit utilization shows you’re only using a small amount of the credit that’s been loaned to you.

Credit Mix

Credit mix refers to the types of accounts that make up a consumer’s credit report. The different types of credit that might be part of a consumer’s credit mix include credit cards, student loans, automobile loans and mortgages. Credit mix has a larger impact on a score if there is not much information in the consumer’s credit file compared with having more substantial details of credit usage and repayment by the consumer.

Installment loan


Car loan

Student loan

Revolving credit

Age of credit

Is simply how long an account has been open and reporting on your credit report. You do not want to close an account or have an account get closed by a credit grantor if you can help it. Closed accounts negatively affect your credit score.

Payment History

Payment history is the most important part of your credit. I could go on and on. But simply don’t pay late on any account if you can help it.

Credit is Pay to Play

Credit is a pay to play proposition. If you want a credit score you are going to have to spend money. It is wise to spend $5 -$10 per month on each credit card to keep the account “active”. You now have bills every month amounting to $40 – $80 per month. This is the start to your financial relationship with lending institutions.

Companies simply want to know if they lend you money are you a high risk or a low risk to paying the money back. They are betting that you will carry a balance so they can charge you interest. Thus making money by simply lending you money. Pay balances in full by or on your monthly statement date to avoid paying any interest.

For credit mix which makes up 10% of your credit score, lets say you went ahead and got 2 secured installment loans with a minimum of $1000. We are up to $6000 worth of credit lines issued. However, you would have 10 credit accounts reporting. With new, rebuilding, or bad credit you are well on your way to building credit again.

In Conclusion

Building credit is easy. It simply takes time and money. Trans Union, Experian, and Equifax are the 3 major credit bureaus. Purchasing a good credit monitoring service will help you see your credit reports and scores on a monthly basis. Credit mix consists of installment loans, mortgages, car loans, student loans, & revolving credit.

Payment history is the most important when it comes to building credit. A close second is credit utilization. keep your credit utilization under 10% is ideal but overall keep it under 30% is recommended. Age of credit, credit mix, and inquiries are huge factors for underwriters and have smaller impacts. All of them are important and each component of your credit score should be taken seriously.

Why is Budgeting Important For Your Personal Credit and Business Credit

Why is Budgeting Important for Your Personal Credit and Business Credit

Budgeting is the most basic and effective tool for saving money. But some people tend to avoid it because they simply do not want to limit themselves. A lot of people are often turned off by simply hearing the word budget.

They associate it with a lot of hassle, headaches, and restriction. They have a lot of budgeting excuses and think that they are too poor to do budgeting task. We all know that it’s wise to budget in our own lives.

In order to have enough money, we need to do budgeting. It is already part of our system. Budgeting allows you to create a spending plan for your money.

It also ensures that you will always have an adequate money for the things you need and for the things that are important to you.  If you are currently in a debt, budgeting will help you work on getting out of debt. Budgeting does not only work for a married couple but for single people too.

It is better to know the power of budgeting at an early age of your life because it will help you to save more for your future ahead. It can also help you with emergencies such as becoming sick or injured, calamities and any other unexpected situation. Budgeting helps you to reach your goals.

If you are planning to buy a house or a car, budgeting will help you work on it because it helps you prioritize the things you only need and that is important to you. A wise budget can benefit you from a lot of things like it gives you the control over your money because budgeting is an intentional way about your spending or how you save your money. It keeps you focused on your money goals – it helps avoid you from spending unnecessary money for the items and services that you do not need.

Budgeting saves you from the stress of lacking funds and makes you aware of what is going on with your money. You will not be shocked where your money goes. These are only some of the benefits of budgeting that will help and make your life worry free and stress-free.

Budgeting is not also for personal need but also for business need. It is much needed in business purposes unlike in personal matter. In order for the business to be successful and debt-free, smart and wise budgeting is the main key to it.

Some of you might be wondering what the importance of budgeting to you as an individual is. It is very helpful to a person who does not have a family yet and more helpful to a person who has a family. Budgeting makes a happy family.

Can you imagine your life without doing a budget? Can you imagine that when you ran out of money, you will borrow and borrow from others until you are in total debt? Sounds difficult right?

In budgeting, you are far from having a financial crisis. It is already proven and tested. It can also help you to build a home, start up a new business, buy a car, for schooling purposes, having a new baby, serious illness and other purposes.

If you are not into budgeting yet, I suggest that you should start it now. There are three simple steps that you need. First, calculate your whole income or money you are earning.

Second, figure out your expenses either direct or indirect. Lastly, compare your expenses with your source of income and see if your budget is weak or strong.

Then you should make a proper personal budget to have a good financial state. However, each and every one of us has its own way of doing the spending plan or budgeting, your budgeting style will determine how successful you are at budgeting.

Remember that if you do not have a budget for everything, you might end up in overspending each month and you will end up working just to pay your debts and feed yourself. If you feel like budgeting will limit or restrict yourself into something or a lot of things, then imagine first and see yourself in the future that all your salaries have to be applied in paying debts and credit card payments.

Budgeting does not mean limiting yourself in the fun in your life but opening up new opportunities and money to have more fun in the future. Do not rush things as it is not always meant to be successful. Learn how to wait for a much better outcome.

Budgeting involves a systematic and disciplined investment mechanism. It will help you eliminate unnecessary spending in your personal life. A budget gives you knowledge.

You can start up your personal budget by taking a look at your income sources, expenditures, debts and bills. Just by going through your financial information and writing them in an organized manner you gain a deep understanding of how your money flows in and out. A budget puts you in control.

It enables you to take charge of your finances and your own money. Keep in mind that the main focus of budgeting is to help you control your finances, not all the way around. You should be able to adapt in case of unexpected expenses and be flexible.

A budget is a communication tool. Each and every one of us has a set of priorities and values regarding how to handle money. If you happen to budget with a partner, chances are you might have different budgeting technique and ideas as well as what expenses are necessary and how much do you need to save and spend.

If budgeting is necessary for our personal lives, then budgeting is much needed in business matters. Same goes for business, budgeting plays a huge role in it. It does not really matter if it is a small or big business.

A business that does not budget will create a host of financial problems down the road – this is very accurate in all business age and sizes. Just like for the personal budgeting, a business has also a certain debt obligation and expenditures such as rentals, utilities, loans or lines of credit, professional services, vendor accounts, payroll, purchasing obligation, advertising, and IT services.

Sound crucial right after you read it, right? That is why budgeting is much needed in business operation. If you are poor at budgeting when it comes to business chances are highly at risk.

Imagine if you do not meet your obligation to your employees about their salary, they will leave the company, what about not carrying insurance? The company will be open to liability. And most especially what if you are not able to pay your rent?

That will lead to an eviction. For business budgeting, you might consider hiring an in-house or outside accountant or a business manager who has an excellent knowledge in business finance to ensure that the budgeting is done accurately and correctly. If you do not practice or learn to budget in your entire life and you open up a business, you better think twice.

Starting and opening a business is not just opening itself. You have, and you need to consider a lot of things even the smallest one. You have to study each and every detail of it.

Not just for your own knowledge but for the future and success of your own business. Having a business requires extra effort and time you need to put in it. Remember to always implement a smart budgeting especially in a small business because small business means you only have an exact or not too big amount of capital that will help you expand or upgrade when you think of it.

Without a budget, means that you are shooting in the dark. You are doing it for nothing and worse it is only by luck. An effective budget should breakdown revenue and anticipated expenses by month or by quarter.

A business fails to plan, plan to fail. It is very cliché by now. Budgeting or creating a financial plan is the major factor of business planning. A budget is a future financial plan and forecast for a specific time period.

Budgets often use historical data to be formulated, which means that as a business grows and develops its budgets should become more accurate as it has more historical information to draw from. Budgeting also helps the business to have a direction in where you want it to go.

You can easily track where your money goes and where you spend it the most. Budgeting can also be demanding – it demands a fair amount of time and energy. Most of the people wonder why budgeting is important and what is the use of it.

Well, business managers or owners’ budget and prepare budgeted financial statements for three main reasons which are modeling, planning, and control. I hope that this article explains the importance of budgeting for your personal and business credit. Always keep in mind that budgeting is a fundamental need in our life.

It is a technique that will make our lives easy and hassle-free. Having a smart budget prevents us from debt and for the difficult situation that involves monetary issues. Nobody wants trouble in life, I am sure of it.

We only need to be wise in terms of handling money and have a self-discipline and control in spending money on certain things. You also need to set a goal for yourself for the sake of budgeting. This will test your self-discipline if you can follow it continuously.

Every person wants savings in their banks, so they can start a business or buy something that they can call their own. This article also helps you understand the importance of budgeting. It helps you know what the main reason is for having a spending plan.

Budgeting does not make you rich or poor. It makes you an intelligent person who knows how to handle a quite huge factor in our life nowadays. Always remember that it is better to start budgeting at an early age and teach your children or siblings on how to save money and budget it so that they will have their own savings.

This also serves as a practice for them in preparation for their future. Imagine without having a knowledge of budgeting, you do not know where exactly your money goes. You will not be able to differentiate the important things or services you need to spend on, you will be having a hard time monitoring your own money and will lead you to a huge debt.

Nobody wants that, right? That is why we need to learn how to budget our own money because it will prevent us from such situations that will cause us so much. If that happens, it will also affect our credit score as an individual or our business credit score if we have one.

We will encounter a lot of difficulties in our living. Budgeting is very important to a family. It is also difficult to create a spending plan for a family.

Sometimes, you cannot control how they use something or how much they spent. I am talking about the consumable ones. Though it is not about limiting them from food or personal needs but allocating a specific amount in buying those needs might be a huge problem.

The best way or safest way is to allocate an extra amount for it. In order to save money, you need to be a practice of being a practical individual. If you care about your future, you need to be practical.

Sometimes, it’s okay to spend on the things you want but be careful about spending your money. I hope each and every one of you will learn and will use the art of budgeting for a clearer vision of your own future. The sooner, the better.

Credit Building School Offers Free Social Community

Credit Building School Offers Free Social Community

What is credit building school? 

Credit building school is a free social network. Membership is free and it is easy to sign up. Premium content will be available for purchase. Main features are digital downloads and courses.

Members can enjoy a private social community here at credit building school. This is unlike private groups on other social networks where you typically have to have made a purchase in order to join. The support you need during the credit building process is readily available to you.

Besides the fully featured social components, credit building school will feature courses that teach credit literacy. Some courses will be free. It is hard to say how many courses there will be. However, there will be enough courses to help curb most of, if not all of the misperceptions of credit.

How does credit building school differ from other websites?

Our premium content while beneficial is totally optional to buy. We want people to engage and learn from each other. We don’t have a paywall up. Anyone can join. There will be free information that is valuable, like a blog post, available for public consumption.

This platform welcomes people seeking to build or rebuild credit. Our community offering sets us apart. You can freely follow, comment, like, share, private message, and post. You can even make your profile private to get a distraction-free experience.

We believe that our courses will allow people to truly understand credit. The social learning environment is very effective and enriches the overall experience. Generally speaking, people learn better in small groups. Especially when those groups are family and friends.

Schools should teach this but they do not. We want people to know that credit is for everyone and with proper use, it can extend your finances. When executed and used properly the benefits of good credit far outweigh any negatives.

Our way is not the only way. We readily admit that. However, people have been learning on their own for years. Look where that got them. American households are more in debt than they have ever been in at any other point in history. We think it is because of over-leverage and poor understanding of proper use.

We do not teach self-control. We do not control anyone’s budget. Nor do we recommend that you do or do not utilize credit. These are decisions that you have to make on your own. You will have the knowledge to make your own decision.

We are only here to serve those who are new to credit, those who are rebuilding credit and those who want to maintain a credit score. We cannot possibly entertain those who do not want to do those things. Our mission and focus are to teach the fundamentals of credit building and expand on the topic.

When should someone join credit building school?

Anyone can join credit building school at any stage of the credit building process. We know that they will get a boost from our network, the support we offer, and the courses. Everything is done on the site so join us whenever it is convenient for you.

Even if you have good credit currently we are confident that you can gain more knowledge. You can increase your credit score and add to your credit profile by joining our site. It is tough to go from 600-700+ for most people. We know how to get them over the hump so that they can grow from having good to achieving excellent credit.

There will be a beginner, intermediate, and advanced courses. We will touch every aspect of credit, credit building, and even get into business credit. I would love to go in depth here but things are currently being built. You have to be a member to ‘see” what we are truly doing.

We are simply providing an overview for the public by posting this on our blog. The main page non-members will see will be our latest blog post. We do not want to “sell” you on becoming a member. It is totally up to you. No real attempts will be made to acquire users.

When you search for credit-related topics specifically credit building and you stumble across our site. That’s the moment you will decide if you need help. We’ll be here ready to serve should anyone decide to join.

For those new to credit, there may or may not be a wealth of information yet. Don’t fret. You will be greeted by community leaders, your peers and or your friends. New members will be messaged by an admin to learn your specific goals. From there we will recommend certain actions for you to take and you will be off to learn and build your credit.

For those who are well versed in the credit world, we encourage you to teach and guide those who are not. Sharing information is what makes us great. Let’s be transparent about credit.

This is a private community. We want people to be able to learn and build credit without outside noise. There is no judgment here. People with the best credit may have had hiccups along the way. We are certain that people can learn from other peoples experiences. Without having to go through them.

You can invite your family and friends to join the network. Building credit together is often easier than doing it alone. Having support overall is better than having no support. So you’re never truly alone on our website. Admins, authors, teachers, and community leaders will be there for you!

This is a new concept and a new site. Our first members will be anchors and future influencers should they stick around. We want you to grow with us. Every change will be made with the community in mind.

Your participation and input are what will make the community thrive. You, your unique experience with credit, and your willingness to share are how we grow.

Who is our ideal user?

Someone who is stuck and do not know where to go. Someone who has no idea about credit but wants to get credit accounts and a good credit score. Particularly young people. We want them to make good credit decisions while they are still young.

Young people are the future of the world. If they start out with good credit habits they increase their chance of reaching their dreams in their youth. That means, they can potentially be successful for a longer time. that’s great news for the economy and for their personal lives.

We believe that young people will be the ones who change things in America. They are our main focus. That does not mean that older people do not need this information. We are here for everyone.

When will the 1st courses be launched?

We have no official release date for courses. Everyday work is being done to make the absolute best course on the topics we discuss. Only our members will be updated. Not the general public.

Credit Building School Offers Free Social Community Continued

We know that being that is new to credit or rebuilding credit may not have the most available funds. That is the main reason the community is free. Users who never purchase anything will still benefit from the community. They will have to interact with people in order to get the help that they seek.

Members who purchase premium content will have specific problems solved, thus building credit much faster. Everything totally depends on the individual. You may need a consultation. You can message Admins for free. Getting help and an action plan to achieve specific goals will have a cost. That is the nature of a consultant-client relationship.

You may need to repair your credit before you even take a course. That is a totally separate action. We offer credit dispute templates for sale in our store. If you have negative items on your credit report you may never be able to build credit until that is fixed.

We actually provide that help for free if you message and admin and show a purchase confirmation. They will help you with the entire process for free. Credit repair is a lengthy process. That is the value members get out of joining our website. Free support during credit repair. Also, support for post-credit repair and next steps.

Where else on the internet can you find free support for DIY credit repair?

That is a service that cost 100s if not 1000s of dollars. Members get it for free when they purchase our dispute templates.

There are so many reasons to join credit building school.

  • Credit Building School Offers Free Social Community.
  • Credit Building School Offers Free Credit Repair/Dispute Support.
  • Credit Building School Offers Free Membership
  • Credit Building School Offers Some Free Courses To Learn about credit
  • Credit Building School Offers A Private Fully Featured Social Network

If you are so compelled, please share this post with anyone who is looking to build or rebuild their credit. Join our community and start getting help with your credit building journey today!