4 Tips to Follow When Building Your Credit

4 Tips to Follow When Building Your Credit (1) (1)

Your credit history has massive impact on your personal finances, as well as your entire life.  Individuals with poor credit, or no established credit at all, face many challenges when it pertains to milestones in life like purchasing a new vehicle or your first home.  Once you have established credit, it may be difficult to manage. It is important to remember, credit options may not make you dish out money immediately, but they do need to be paid back; this is where the difficulty may come in.  Nevertheless, credit can always be built back up.  

Here are 4 tips for building your credit.

Make Sure Your Credit Reports are Accurate

With the evolution of the internet, there are many ways for someone to look up their credit reports; some resources will provide one score, while others will go more in depth with a full credit report. There are three major credit bureaus that your credit report and score is based off of, Experian, Equifax, and TransUnion. It is important to make sure that when you are accessing these scores, they are accurate.  If you see something on your report that isn’t supposed to be there, or it is not accurate and negatively affecting your score, you can attempt to dispute it.

Confirm Areas That Need to be Improved

Once you analyze your reports from all three major credit bureaus, confirm what areas need to be improved.  Whether it is a credit card with a long term balance, or a loan that you’ve missed payments on. Make note of those areas, and tackle them strategically over a period of time.  It is always important to remember that the improvement of credit can happen, but does often take some time and patience.

Make Any Late Payments

If you notice late payments on your credit report, immediately take steps to bring them up-to-date.  Late payments can affect your interest rates, and build up penalty late fees that will push back any payment progress that you’ve been making.  Always keep in mind, if you can pay off an entire credit card balance, it is better to do so as soon as you can.

Make Payments In Full & On Time

In future credit purchases and transactions, make sure to make your payments on time, and if you are able, in full.  If you are unable to pay a transaction off in full, put the maximum amount you can afford toward your monthly payment; the quicker the balance comes down, the better.  To help make your payments on time, considering setting up auto-pay. Auto-pay is a great tool to ensure you don’t accumulate late fees due to a missing payment.

Are You Making These Common Finance Mistakes?

John J Bowman Jr Accountant - Personal Finance Mistakes

It happens every month without fail. When payday rolls around on the third Friday of the month, your bank account looks healthy – filled with money to spare, even. With a few easy taps on your banking app, you’ve sent off your rent, covered your electric bill, and paid off a little of your credit card debt. You decide it will be alright if you splurge a little on dinner, a movie, a maybe even a quick weekend trip to the local shopping center. A week or so later, you absentmindedly swipe open your banking app – and stare in disbelief. Your bank balance is practically anemic. Where did all of your money go?

 

Spending Impulsively

Your morning Starbucks latte could be costing you. Crunch the numbers: a venti latte costs roughly $4 a pop. If you multiply that times the five days in a work week, you find yourself with a coffee bill of $20 a week, or a full $80 a month. In other words, the money you spend on coffee alone could have covered your entire grocery bill for a month. Small expenses add up – so avoid making impulse purchases. If you think you might be splurging just a little too often, check! At the end of the month, compile all of your card charges and assess how much you spent on necessary items or services (i.e., rent, food, gas) versus how much you spent on unnecessary treats or luxuries. You might just find yourself reconsidering your coffee budget afterwards.

 

Paying Too Many Subscriptions

Do you really need Netflix, Hulu, Amazon Video, and HBO Go? Probably not. Signing onto a service may seem simple and cheap when you’re in the free trial period, but those monthly fees accumulate quickly. Do an inventory of the subscriptions you have and decide which ones you can afford to cut ties with.

 

Living on Credit

Having a credit card doesn’t give you access to free money! Credit card companies make their enormous profits off of people who make minimum payments and allow interest to accrue. Just think – by leaving the expense of a single small item on your balance, you could end up paying out twice the original price in interest and fees. Believing in the “free money” myth could cost you money; living on credit could leave you bankrupt.

 

Overspending on Housing

You may want the in-building gym or slickly designed kitchen – but can you afford it? According to a report from Harvard’s Joint Center for Housing Studies, over one-third of all American households spend 30% or more of their take-home pay on housing expenses. Most financial advisors set the expense ceiling for rent at 30% of a person’s take-home pay; however, even this might be too high for someone struggling to pay off hefty student loans or provide for a family. Don’t let a nice apartment or charming home lure you deeper into debt. If you do, you might find yourself needing to sacrifice your personal life and stay home far more than you ever wanted to.

 

“Keeping Up” With Others

If all of  your friends leapt into crippling debt, would you follow? The answer might not be as easy as you think. Sometimes, it can be difficult to say no to a weekend trip or fancy dinner – even if you know that the expense would eat into your budget for the month. Make a habit of thinking your budget first, and fun second – or risk losing out on a significant chunk of potential savings.

 

What is Cryptocurrency?

Most people have heard of Bitcoin, but have no idea what it is or how it works. Bitcoin is a form of virtual or digital currency known as cryptocurrency, which uses cryptography or code to keep transactions secure. Cryptocurrency introduced a new type of currency on a software structure.

What Is The Origin Of Cryptocurrency?

Satoshi Nakamoto was the originator of bitcoin, and release the original version of the Bitcoin software in 2009. The open source worked on the software for two years, when Nakamoto presumably moved on to other projects. There’s a lot of speculation about who Nakamoto actually is, but it may remain a mystery.

How Does It Work?

Cryptocurrency is real money in a digital a form of payment similar to secure, online e-commerce payment processors to pay for goods or services. A lot of companies involved with cryptocurrency issue tokens that are their form of currency that is similar to tokens in an arcade. Actual money is exchanged for the tokens. The new form of currency is so popular that there are more than 1,400 cryptocurrencies that are used for online trade. According to statistics, all cryptocurrencies currently in use have a value of approximately $708 billion. Bitcoin, the leader in cryptocurrency, has a value of $283 billion.

What Is The Blockchain?

The blockchain is the database that’s compatible with cryptocurrency. The way the blockchain differs from a traditional database is that the data can be stored on thousands of computers in locations around the world. Since the data is on so many systems, the cost is much lower than with a traditional database. Due to the encryption, if part of the data is compromised, the entire database isn’t exposed.

What’s the Attraction Of Cryptocurrency?

1. Many people are using cryptocurrency because they see it as the currency that everyone will be using in future generations. They’re buying the currencies now because they speculate that it will be more valuable in the future.

2. Inflation is another reason that people are using cryptocurrency. When banks manage the supply of money, it tends to decrease in value during periods of inflation.

3. Some cryptocurrency supporters like the idea of the blockchain, the system that cryptocurrencies use. The theory is that the blockchain is more secure than more traditional systems used for processing monetary transactions.

4. Some cryptocurrency users prefer the idea of conducting financial transactions without government interference.

5. Some financial speculators aren’t interested in using cryptocurrency because they’ll be more widely accepted for financial transactions in the future. The belief is that the currencies will soar in value, so they’re buying them know before the prices drastically increase.