Staying Strong as Your Credit Improves

By July 3, 2014Credit Repair

good-credit-practicesFor many of us, our first taste of financial freedom began with our first credit card.  We took our friends out to dinner, or maybe did a little shopping.  Then we did some more shopping; in fact, probably more shopping than we realized.  After a few bills came and went, our balance was much higher than we could pay off in a reasonable period of time.  Likely we got another card and perhaps it escalated from there.  Sound familiar?

Reality eventually sets in and we realize it is time to start paying off the debt and getting serious about our credit.  If you have accomplished that, here are some tips to keep you ahead of the game as you continue to build your credit:

  1. Refuse to fall prey to old habits.  As you have learned by now, the lowest interest rates and best reward programs are reserved for the elite; those who have the best credit ratings.  If you have worked hard to restore your credit, you may have found yourself included in that circle.  That means credit offers may start finding their way to your mailbox.While some of them might make financial sense, such as, an auto loan at less than 4%, it only makes sense if you actually need a new car.
  1. Weigh the options carefully when deciding to refinance.  With mortgage rates on the decline, refinancing can be a good way to reduce your expenses.  Understanding the process is key.  It is critical to understand that although you may be saving a few percentage points, the amount you spend in closing costs may counter-balance what you would have saved in interest.Further, mortgage companies and banks will make a hard inquiry on your credit report, which will cost you a few points for each inquiry.  If you don’t know what you’re doing, consult a financial advisor to properly guide you before jumping headlong into a costly endeavor.
  1. Carry your new lifestyle into a stable future.  You worked so hard to pay off your bills and restore your credit.  Take a deep breath and relax for a moment; then keep forging ahead with your new financial habits.  After putting in such effort, it would be a shame to backslide now and have to start all over again.You have established a strong foundation to build upon.  Your next step should be to build an emergency fund for surprise expenses, such as automobile repairs, unexpected medical expenses, and so forth.  Keep your emergency fund for strictly emergencies, and apart from your regular savings.

As you further develop financial stability, you can expand your credit opportunities with an improved credit score.   If you find yourself uncertain about how to manage your credit or finances, it may be helpful to speak to a credit repair specialist, such as Ovation Credit Repair.  Building healthy habits as early as possible is essential to securing your financial well-being. Our knowledgeable representatives are here to help.

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