YOUR Credit And WHY It Is Important THE BASICS

Dated: 10/12/2018

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YOUR Credit and WHY it is Important


Money and credit. We have conversations about them all the time in business and in the news. However, these topics are rarely discussed with family, friends, over the dinner table except when their is an argument over the lack of money we have to meet our financial obligations or the mismanagement of the funds.

We are surrounded all the time by opportunities to spend money on things we do not need and the temptation to borrow is readily available. Yet, despite this, little is known by the average person about the world of money and credit.

As a society, we owe it to ourselves to develop a better understanding of how to safeguard our  hard-earned money by protecting our credit and how to make our money and credit work for us by opening doors of opportunity. 

What you don't understand about credit can harm you!


Why a good credit history is Important:


A good credit history increases the confidence of those in a position to loan you money, like creditors(lenders). When they see that you have paid back your loan when and how you agreed, lenders are more likely to extend credit again. You will be seen as fulfilling your agreement. With good credit, you can borrow for major expenses, such as a car, home, or education, and you can borrow money at a lower cost.

Generally speaking the better your credit, the lower the cost of obtaining that credit usually in the form of interest rates and fees.

This means:

  • You'll have more money available for savings and spending

  • Lenders will have more confidence in your ability and commitment to repay the loan on time and in full

Good Credit will help you achieve:

  • Short-term goals, such as:

  1. Renting an apartment

  2. Getting a new job (which may require a credit check)

  3. Making a major purchase (e.g., furniture or an automobile)

  4. Keeping your other rates low (e.g., auto and homeowner's insurance)

  • Long -term goals, such as:

  1. Renting a better apartment

  2. Going back to school

  3. Starting a business

  4. Buying a home of your own

Given the information so far, you might be thinking, so what? We all know people who don't always pay their bills on time, and yet they still have nice cars, nice clothes, and seem happy.

While that might be the case will they ever be able to reach their long-term financial goals? It may appear that they may have met some of their short-term goals, but will they be able to achieve long-term dreams and true financial security?

Managing your fiances and working toward financial goals and stability require discipline and knowledge of how to maintain a good credit record. 

Remember: credit is a privilege! The ability to borrow money at reasonable terms and rates cannot be take for granted or assumed. An impaired credit or payment history may prevent you from:

  • Saving money

  • Achieving goals

  • Accumulating wealth

What would you rather have, things that will rarely last or TRUE financial Security?


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Jennifer Burns

Jennifer was born and raised in Maryland and for the last 21 years has resided in Middletown, MD. Upon finishing her studies at the University of Maryland University College with a Bachelors degree in....

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