Dat Credit Doh

Well hellooo! I know that it’s pretty late on a Monday to be posting, but I want to get down to business here.  I've been working on getting all my school stuff straightened out. Here I am again cutting it super close (just like last year) and making things all stressful! On the bright side, I'm enrolled! I'm wait-listed for one class, but otherwise, I'm done! All I have to do is get my room assignment and I'm as good as a resident of Las Vegas again!

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Each Monday is supposed to be dedicated to “No Spend July”.  Sadly, I haven’t been able to do an amazing job at monitoring my spending, but I have been working on a few other things that have a whole lot to do with my financial future.   To check out how Ashley is doing with her adventure into learning how to budget, head over to her blog!

 Today I want to talk about something that totally sucks but is so super necessary in the world of money:

Credit.

If you ask me, like that good ol’ Dave Ramsey says “Cash is king”.  And he is totally right. It is.  But in some situations, you just need good credit.  People look at your credit all the time. When you rent some please to live, they check your credit report. When you get a mobile phone contract, they check your credit report. If you want to buy a house and you aren't carrying around $100,000 in your wallet, you’re going to need good, experienced credit to get a mortgage.

I am 21 years old.  I have some credit but not a lot.  I’m working really hard right now to bring up my score and make some big payments so that I ca refinance my car in about a year. I’m also working at it so that when I decide that I want to settle down and buy a house, I don’t have to struggle and wish I’d been a little bit smarter with my credit when I was young.

Today, I want to share with you what I have learned about Credit so far. Some of this has been from experience and some has been from my job at a private label credit card where I am frequently able to see why denials and approvals are made while looking at credit reports. 

Remember that app I told you about? They have an awesome blog with an article specifically on this.  It says it's only about cancelling credit cards, but it isn't.  Worth a read. 

1      If you have deferred student loans, your score will be inflated.  It might look like your score is amazing, but when creditors actually look at your report, they’ll see that most of the “experience” on your credit is stuff you have but you don’t pay.  That doesn't actually show them anything about how you handle credit.

2      Limits matter. If you don’t have any accounts with limits over $500 your credit score will suffer higher limits with less the 90% of the limit used looks good and will bring your score up.

    Use credit cards like debit cards.  I pay off my credit card days after I use it. Granted, I've only had it for about a month, but my score has already risen by 70 points because I have already made a payment on it.

      How you pay affects your score. If you always pay late, your credit will reflect that!

      Until you've been using credit for several years (read 7) your credit probably won’t look amazing. I, being 21 and having had one thing on credit (9 month old auto loan), looked really crappy to creditors when I was trying to get a new car, but you have to start somewhere. I now have a few different accounts using credit and my score will gradually go up the longer they sit on my credit report.

      Start small. Don’t try to go and get a major credit card right out of the gate. If you have rookie credit, get a rookie credit card! Your bank or credit union will likely approve you for one if you have proof of income and new credit.

      MONITOR!!! You should always watch your credit for errors. My report has an address on it I haven’t ever lived at.  Scary. Watch it and dispute when you see things pop up that are NOT you.

Credit is a game.  It isn't an easy one either. You have to work it for a long time to win.  Just keep in mind that while it does suck, your credit matters.  There is WAY more to credit than what I have just gone over.  There is even more that I want to say, but I can see people just clicking right past this post as it has a million words and isn't really a whole lot of fun…so I’ll quit now. 

I hope that someone can get something out of today’s post about money!