Governments are meant to lead by example, regardless of whether they intend to or not. Sometimes they give us examples of what not to do as well as examples of what to do. Wall Street executives also happen to be unwitting role models to people all over the world. Still, mistakes can be made at any level, especially when irresponsible spending and irresponsible lending are involved. If you want to keep your credit in tip top shape, it is vital that you pay attention to these three credit lessons which have been learned by banks, home buyers, mortgage lenders and our national government.
Lesson Number One:
Credit is not a license for you to spend. Just because you have a ton of available credit that does not mean that you should run right out and try to spend it all. Lenders are trying to sell loans, not necessarily to take your best interest at heart, which is something that many home buyers have noticed in the past few years. You need to take personal responsibility for your level of spending; keeping records every month of every expense in order to see where your money is really going. You must be willing to take a good hard look at the items you want and how they compare to what you really need before you decide if you can afford to accept and to use the credit that is being offered to you by a credit card company or lender.
Lesson Number Two:
Living beyond your means is a really bad idea. Many people criticize the sub prime home buyers who were taken by the credit crunch and mortgage crisis. Our nation unfortunately has a culture of spend now and pay later, unfortunately it is not always possible, let alone easy for many of these consumers to pay later for the things that they have already purchased. Situations like these rely heavily on foresight and honesty. It is important that you look ahead before you ever commit to making a purchase of big ticket items on credit. Do you know what your financial situation is going to be like in five years or ten? Be brutally honest with yourself. It may seem easy to spend now and pay in the future, but it could hurt more than harm.
Lesson Number Three:
If you ignore your credit, you will lose it. Your credit is your financial credibility, but if you batter your credit score by taking on too much debt, you will lose your ability to use credit when you actually need it. Credit can be tricky for you to manage, but it is absolutely worth it in the end. There is no billion dollar bailout for the average American card holder, so if you dig yourself into a hole of debt, you will not have many choices to rectify the situation.
Photo Credits: 1
Related Posts -
How Much Does Your Money Matter to You? If you were to ask anyone on the street that question, odds are the majority would answer, “very much.” However, these same people will easily turn around and drop a small fortune on something without a second thought as to how it would return to them. Before you get started...... -
The Truth about Credit Cards and Debt pt 1 This is part one in a two part series about credit card debt and where we actually stand as a nation when you consider the pure numbers. You have probably heard figures like "The average American carries more than $8,000 in credit card debt on average." But what does this...... -
Does Your Financial Future Look Gloomy? While no one can look into a crystal ball and determine where they will be financially in twenty, thirty or forty years, there are some early warning signs that may indicate that the future might be a bit gloomy. The key to successfully preparing for your future is to avoid...... -
How to Avoid the Three Worst Financial Traps No matter how wealthy or poor you are, there are financial traps that are waiting to disrupt your lives. Many people end up finding out too late that they are in the depths of one and it is nearly impossible to get out. However, there are specific steps that you...... -
4 Easy Ways to Raise Your Credit Score For many Americans, dealing with a low credit score can be incredibly frustrating. It’s tough to get any loans and in some cases, it may even affect your prospects for employment. If you’re sick of dealing with a low score, it’s time to starting putting into motion some techniques that......
Related Websites -
First-Time Home Buyer Tax Credit Recently I visited my condo building for the grand opening weekend. I was not allowed to see my unit as the unit itself was not complete, but more importantly the third floor was not completed. The grand opening was the first time I was allowed to see the inside of...... - Home buyer's warranty may be a good deal This insurance is sometimes thrown in by the seller in a real estate purchase contract. It protects the buyer from unexpected repair costs in their new home for a period of time -- typically one year after purchase. Repairs on most major systems in the house (heat, air conditioning, septic,......
- Seven New Years Financial Resolutions For 2010 This is a guest post from the National Endowment for Financial Education (NEFE), a non-profit dedicated to improving the financial literacy of all Americans. NEFE operates the site Smart About Money. Follow NEFE on Twitter at @nefe_org The new year is coming, and with it come the resolutions. Here are......
-
Some Good Home Improvement Advice There are many points of view from which you can take a look at home improvement advice. When we discuss the different home improvement options, our tendency is to do so from the point of view of most of the people that become handy-capable around the house. That point of...... -
Senate Possibly Extending First Time Home Buyer Tax Credit Did you want to use the first time home buyer tax credit but you couldn't get it to work for you in time (it's set to expire the end of November)? You may be in luck! Senate is considering extending the first time home buyer tax credit until Spring of......
- Personal, Field Gear Original Items Current Militaria 2001-Now Militaria Collectibles
- Personal, Field Gear Original Period Items Vietnam 1961-75 Militaria Collectibles
Categories:
News, Personal Finance, credit, economy
Tags:
1 comment so far ↓
“Your credit is your financial credibility.” I’m not 100% sure that I understand this statement, but I don’t think that I agree with it. To me, a person with positive net worth, positive cash flow, and no debt has a lot more financial credibility than someone who has merely played along with the dictates of the credit industry to procure a high credit score.
Leave a Comment