Establishing and Improving Your Credit

Good credit is important! Having good credit may be the deciding factor in whether you are approved for a mortgage, vehicle loan, or school loan. On the other side, people with bad credit will find it more difficult to obtain a credit card with a low interest rate and will find borrowing money for any purpose to be more expensive. Establishing credit is simple and easy to start. Fixing credit can take some time but worth it in the long run.


Establish credit and take care of it. One thing to remember is that it is critical to always make on-time payments to your creditors. You can arrange payments using the excellent auto-pay option in advance, ensuring that you never forget a payment’s due date. Other methods to establish credit are by opening savings and checking accounts, paying rent on time, lower credit card balances, and do not apply for any loans or new credit cards.


Now let’s discuss fixing your credit if you are well established but need to raise your credit score. So again first and foremost, be sure you are paying those bills on time. Did you know that 35 percent of your credit score is made up of your payment history? Your score might be significantly lowered by even minor errors. Missed or late payments can lower your credit score and are recorded on your credit report for up to seven years. Pay those bills on time!


Second, keep your balances low. Utilizing credit cards is not a negative thing, but it’s crucial to keep your debt under control. Paying down your credit card balance in full each month is the wisest course of action. If you can’t, make the largest payment you can. Make an effort to maintain your credit utilization percentage around 30%. The balance should be lower than $3,000 if your credit card has a $10,000 limit. Additionally, be sure you comprehend how credit limits function.


Lastly,  even if you have no need for older credit cards, keep them active. Think of adding periodic minor purchases to them, such subscriptions to streaming services. Then, to ensure that you pay the balances in a timely manner, set up automatic payments or payment reminders. Additionally, be cautious when opening new accounts because they reduce your average account age.


If you are feeling like you need to get a grip on your credit, take a weekend to look over your financials and see where you can do better. Stick to a bill pay schedule, use that credit card less, set up those auto-pays, and pay off those balances. Set a goal and be patient. You got this.

Back to Budget Basics

Back to Budget Basics

Let’s get back to basics. Budgeting seems to be a lost art and with credit card debt at an all-time high in the US at $930 billion, we could all take a better look at our finances and make some adjustments.

First start with your actual net income. Do you have one income and provide for your whole family? Do you work two jobs and have a side hustle? Do you receive child support? Be sure to think about any areas you receive extra income every month.

Once you have this established it’s time to list all your monthly expenses…utilities, mortgage/rent, car payments, student loans, credit card payments, medical bills, wifi, etc. Even the small bills! Don’t forget about Netflix, Disney+, and any other monthly subscriptions you have. These are easy to forget since we don’t think of them as a large expense but they still add up quickly. (This would be a good time to see if you even use all of these subscriptions. Anything you can cancel?) Estimate your monthly grocery spending as well. Also don’t forget bills that you may only pay quarterly or yearly. These may be your home insurance, car insurance, HOA fees, etc.

The end goal with a budget is to make sure you are not living over your actual income! Paycheck to paycheck is hard enough but if you don’t have a good grasp of where your money is going, it’s hard to get ahead. This may be a time in your life where the main goal is to prioritize “needs” over “wants” for a while. Set a 6 month goal for yourself that you will be disciplined and eat at home more, or cancel your tv subscriptions for a few months and find other ways to save and invest for the future and watch your savings grow.

Start your budget for one month and see if it needs any adjusting for the following months ahead. Take the time once a week to see how you are doing. Invest in yourself. Read and gain knowledge on saving and investing for your future. Set a reward for sticking to your plan. Since you’re eating at home more, maybe after a successful month you take yourself out for a nice dinner. Invite a friend to celebrate with you.