Credit History Means Everything
If you’ve ever been to an auto dealership and purchased a car with cash, then you might not realize how important your credit history is. If you’re like most other people, then you realize that your credit score is going to determine how much you end up paying in interest and you’ve probably wished your score was higher.
Higher score means Money Earned
Did you know that your credit score not only determines how much you can take out for a loan but also determines how much you will pay in interest if you get the loan? For example, an auto loan if you have a good credit score of 630 or higher, you may pay 1-2%. If you have a lower credit score and need to buy a car, most dealerships will limit the amount you can barrow as well as charge you 5% or more on your loan. You are also limited because the lower your score, the more you will end up having to put down. In many cases with bad credit, you may end up having to put down 20% of your total loan amount.
Repairing your Credit
If you need credit repair in Los Angeles – where most of our readers are from, we recommend you do a few of the following tricks to raise your score:
1) Start paying down your current debts
2) Send some letters to creditors as described in the Fair Credit Reporting Act
3) Don’t take out any additional lines of credit just yet
4) Make you credit payments on time
5) THE BIG ONE: When you get one card paid off, say you’ve been paying $200 / month on the card, instead of using that money for day to day living, apply that same $200 to the next card in line. That way on card #2, you’ll be paying the original monthly amount, but you’ll be adding $200 to that payment, until it’s paid off. Do the same for each card as you finish paying it off. This is a snowball effect that will help you get out of debt faster than any other method, using the money you already have.
Get Out of Debt
You will breathe a breath of fresh air when you finally get out of debt. This will help you to determine what kind of debt you want moving forward. In getting out of debt, you’ll sleep easier knowing you’re able to regain your buying power. Checkout this mom who is very frugal and gets out of debt by wise spending:
She says that it pays to shop the ads, reduce your electricity and water usage and put it towards debt. You have a lot more money in your household than you realize, so use it wisely. Getting out of debt will not only free you up to make the purchases that matter, you’ll be setting a great example for your children.
What are You Teaching Your Kids about Money
Your children are watching you spend your money and they hear the conversations around the house between you and your spouse. If you are always speaking negatively about money, you will pass that along to them. The best thing you can do for your child’s financial future is not necessarily saving for their college fund, but getting yourself out of debt and becoming financially wealthy so they won’t be burdened with your care as you age. What a concept! This makes a lot of sense if you are currently in the predicament of taking care of your own aged parents.
So get your credit fixed, get out of debt, teach your kids how to do the same and you’ll be setting them up for a lifetime of a healthy relationship with money.