So the other day I was going through my credit reporting history and couldn’t help but smile how far I had come. This got me thinking, so many times I hear people complain about being broke and how they have terrible credit score. I had my aha movement… Nobody taught me about credit score but somehow I managed to turn out okay. So permit me to teach you some things I know about credit and credit score in general.
Using the information on your credit report and any additional information you supplied as part of your application, lenders use a mathematical model to calculate a numerical score that represents your credit history. This helps to indicate what kind of borrower you are, and how likely it is that you will manage your repayments.
https://www.equifax.co.uk/resources/what-we-do/what-is-a-credit-score.html
According to Equifax, one of the leading services in the financial industry, we can now conclude that a credit score is a tool that the lenders and the banks use to determine the kind of risk that you have. They make this calculations to see if you are responsible when it comes to your finances and to understand if you will be able to pay the funds bank if they lend you some money. They make an assessment of you, your circumstances and any thing that could affect you paying back your credit in the near future such as taking on an extra financial responsibility.
Depending on what society you live in, you may have the luxury of having to pay things off overtime but some developing countries does not have this option as much just yet. However as majority of my audience is from western countries, I know that the issue of credit is something that will be of interest and yet so many people are not sure how to navigate this topic.
We get paid a certain amount each month and with the rising cost of living expenses and taxes, there’s not a lot of wiggle room. The fact that living expenses keep rising, does not however stop life from happening and sometimes emergencies happen. If you have a decent amount of credit score, you are more likely to be granted this loan from banks and other lenders. It is important to remember that each lender has their specific calculation to assess you and determine if you qualify for a credit loan with them. However, just because you do not qualify with one lender does not mean you will not qualify with others.
Since we know that credit score is very important in determining if we would get a loan or mortgage for instance, then we need to understand that it is highly critical for us to get a good credit score because if you have a low credit score, the lenders will see you as being too much of a risk and they will not really be willing to give you money for things like emergencies for example. A credit score is therefore vital when it comes to us navigating life effectively especially in the society that we find ourselves today.
So many people don’t realise it but depending on the industry you work in and your career prospects, if you do not have good credit, it could stop you from getting a job. For example, if you want to work within law or even finance, if you have a low credit score, it will be a lot tougher for you to get a job in those fields. The crazy part is that you don’t even necessarily need to be applying for a finance assistant position or a legal representative position in the example I gave, but as long as you want to work in those firms that fall in finance or law then having a low credit score, could potentially prevent you from getting into the careers of your dreams.
There is no point in knowing why credit score is important and why it is needed for every day life and to actually thrive if you don’t know how you can improve your credit score if you find yourself having a low one.
Miss Ebbie
There are so many temptations especially in our world that we can have when it comes to using credit card. We live in a society that everything is contending for our attention. Have you realised that when you are searching for a product online and you notice that the next few days, you’ll see an advert on your phone, on billboards, in shops and so on for that item. The truth is marketing has taken over and this is both good and bad so that companies are trying to get you to make purchases.
Now if you do not have self discipline and you are an impulsive shopper. I beg you in the name of God, please do not get a credit card because things may just end up being even worse than it already is. When it comes to a credit card, unless your offer states that you can make a cash withdrawal, please avoid this like a plaque. With this, even if you have an offer of zero percent, as soon as you do that cash withdrawal, you will be charged a cash fee and also interest so just avoid it my dear, you don’t need that stress.
Now to grow your credit score, do not be spending more than 50 % of your credit limit. Ideally you want to stay within spending 30 % of your limit. When you stay within this frame, the companies can see that you borrow money but you are not depending on loans to be able to flourish and live your life effectively.
Another thing you need to understand is that when you receive your statement for your credit card which you need to pay of is the earlier you make a payment towards your credit balance the better for you and your credit score. When I am in a promotional period of my credit card, I tend to pay above the minimum balance within the first 2 weeks of the statement being released. However, when the promotional period is over, I will pay my credit card balance in full within the first 2 weeks of the statement being released. When I do this, the reporting agencies can see how disciplined I am when it comes to managing my finances and it will go into my favour in the form of an improved credit score.
Finance is very important in the society that we live in. If you are not privileged to have studied accounting or finance, we live in a technological age so do yourself a favour and find out information. My mum used to tell me not to get a credit card because the money on the credit card was not mine and I am so glad that I listened. I had to stay away from credit cards until I was matured enough and I understood the way credit card works and if you have to do the same then so be it.
Finance is essential to understand because this is what helps us to do so many things like buying a house with mortgage or even getting a car loan, paying for your phone contract and so on. If you are not able to understand this, so much of your life and might even also include that of your family would be affected and delayed.
When it comes to increasing your credit score, a lot of it and the things that makes a difference is proper planning and budgeting . When you plan properly, you understand what are needs and wants. Even out of the needs, what are priority and what can wait. When you do this, you can plan your finances properly and give you room for growth and to come up higher. God created you for more so do not allow the enemy put you in bondage especially in your finances.
You have the mind of Christ and therefore I believe you are wise and know what to do at the right time. Therefore I know that this year, your credit score will be improved and subsequently your financial life. There is just too much riding on the line for us to still live in ignorance.
