Everywhere you look nowadays credit is required for you to make purchases. Whether it’s a car, a house, or even furniture; credit seems to dictate what we can and cannot have in our lives. Yet, what are people with bad credit supposed to do? I guess they just can’t have stuff and need to live in a box… Of course not! With a little strategy and a game plan you can literally have anything your heart desires. Here are my three reasons why Credit means nothing:
What is it – Credit to most people means how well they pay their bills on time. They make sure they pay everything timely and at least give a little something towards their debt. I look at credit a little differently. At face value having good credit means you are really good at borrowing other people’s money. Now I’m not saying stop paying your bills! But what I am saying is certainly be conscience of your purchases. Instead of maxing out a credit card and believe that you are “building credit” look at it as a charge card; only put a dollar amount that you can afford on it so you can pay your bill off in full when the time comes. What does this do? It lets you avoid the interest that is charged, saving you a ton of money!
Doesn’t Stop You From Making Money – When people ruin their credit by either foreclosing on a home, or going through a financial hardship they assume they’ll never be able to own anything ever again. That is simply not true. Having bad credit doesn’t stop you from making money. Will it take work and discipline to save to buy a home in cash? You bet your sweet cheeks it will. Yet, if you’re dedicated to it, why not? Many times student debt is another big issue when going to buy a home. Millennials have the highest student loan debt the nation has ever seen; many are putting big purchases like home ownership to the side because they simply can’t build up their credit fast enough to get approved for a loan. So what gives?
The Strategy – Huddle in, here’s the game plan if you have bad credit or if you haven’t had a chance to build your credit yet. If you’re credit is already on the downside there is still hope. If you do want to make a home purchase there are still a ton of lenders who deal with people with judgments or collections actions on their credit (If you live in NJ just send me an email, I’ll get a list to you). Say your credit is really in the gutter; then the answer is to produce income. Again Credit doesn’t stop you from making money. Creating good spending and saving habits can be life changing and you’ll never have to ask anyone for money again. Now say you are trying to build your credit what do you do? In the event you want to make a big purchase like a home and don’t have the credit to do so you can always get a co-signer for the loan with good credit (such as a parent) and then eventually drop their name from the loan. Say you don’t want to go that route what is the next best way? I would really start hammering down on your student loans (or the loan that is causing you the most debt) as much as you can. This way if you pay a good chunk of the loan down in just a few months your credit will improve and you’ll also show creditors that you’re serious about paying back debt.
Conclusion – If you have bad credit or haven’t had time to build up your credit yet; don’t sweat it! There are multiple ways to get around borrowing money. Remember that generating more income might be harder than just taking out a credit card, but owing nothing to anyone is really priceless. I’d love to get some thoughts on this blog. Has anyone had bad credit and turned it around? If so how did you do it and what were your steps? Let us know in the comments below!