|
Holiday Spending - 12/7/2009
This week, I would like to focus on building GOOD credit. With Christmas just around the corner, holiday shopping can be used as a tool to help increase credit scores. I talk with people on a daily basis that don’t use, or don’t even have credit cards. These people are missing the boat. You have to realize if you don’t use credit, you can’t build credit.
When you apply for credit, creditors pull your credit report to see if you make your payments on time to other creditors. If you have not proven yourself to other creditors by taking out a loan or using a credit card, getting a loan can be more difficult.
Credit cards are excellent tools to help people build their credit. Let me re-phrase that, credit cards are excellent tools to help people build credit if they are used responsibly… So many people don’t use credit cards because of the high interest rates and scary late fees—so they use cash. Using cash however does nothing to build your credit.
My suggestion: Set up a budget for your holiday shopping. Whatever you decide to spend on gifts, put some cash aside and use credit cards to pay for the gifts instead. When the bill comes at the end of the month, pay it off with the money you set aside. By doing this, you are proving to creditors that you are responsible with money. You can borrow it and pay it back on time. Doing this on a regular basis will help to increase credit scores, making it easier and easier to qualify for other loans and great rates!
Kevin D. Weier
|
