There are a lot of good ideas out there about what to do if you have bad credit or a lot of debt. But have you ever stopped for a moment and asked yourself, "How did my credit get so bad?"
Bad credit doesn't happen because you thought about it and made plans for it. It's more like the other way around. It happens when you enjoy your life and spend money on things you want, not just what you need.
Let's face it. Having credit is a good thing. Your life changes when you get credit. Just try booking that Las Vegas hotel room without a credit card. Most hotels won't even take cash because they want to charge you for that last meal or whatever after you've checked out.
But here are some ways to ruin something good:
- Amass substantial student loan debts.
- Buy the most expensive car or house you can afford.
- Get a loan based on the value of your home.
- Pay for all purchases, big and small, with a credit card.
- Pay your bills late all the time.
Now, let's talk for a minute about this list. Do you always wait to pay your bills until the last minute? If so, you're going to get beat up. You shouldn't wait longer than a few days to pay your bills after getting them.
Next, do you use your credit card to buy both big and small things? Do you pull out your credit card every time you pull up to the drive-thru at Wendy's and McDonald's? If that's the case, you might be giving your credit card statement less and less attention. You might not even notice the $5 charge. If you eat three meals a day, that's $450 a month or $5,400 a year that you didn't even realise you were spending.
Do you want to make that kitchen more modern? Even if you didn't change the countertops, cabinets, or floor, you'd still have to spend about $5,000 just on appliances. Why not use the value of your home to get a loan? Here's what's wrong. The housing market is always changing. You can't know how much your house will sell for until it's already been sold. To sell your home, a broker will charge you a commission fee of thousands of dollars. It would be very easy for you to lose. If you lose too much, you'll end up with a lot of debt.
Buying cars and homes is really about showing off who you are. We buy nice clothes and expensive cars and homes because we want to feel good about ourselves. It's better to live within your means than to live beyond them. People are giving up their nice homes because they finally realised they can't pay for them. Every day of the week, people who drive expensive cars go bankrupt.
I have to add my name to the list of blind borrowers when it comes to student loans. When you're in college, you think it'll be easy to pay off your loans. But it isn't. A "graduated payment plan" is a good thing that the federal government now lets people use. You can also ask for a "forbearance" and skip a few payments if you are still in school or can prove you are unemployed. Instead of taking out loans, you should try to get scholarships to the school you want to go to. There are also scholarships given out by local civic groups. You can also try with your state government. Apply first, and if you need to, borrow.
You can go to http://www.easyinfo123.com/debtfree.html if you're really in trouble and want to know how to get out of debt for sure.
