Putting your net worth aside, credit is going to do the majority of talking when it comes to looking at your financial state. A lot of people fear the ruinous effects that bad credit can have on their future plans and for good reason. However, that doesn’t mean you should entirely avoid ever using credit. There’s as much good as there is bad, and we’re going to look at how you find that balance and take better control of your finances.
It opens and closes doors
Besides getting into debt, one of the biggest fears of poor credit use is that it closes doors you would prefer to keep open. It can influence your ability to get a mortgage, a car loan, even a business loan. More than that, it can impact judgments from future landlords and employers. The flipside of that coin is that proper use of your credit can open those doors with even better deals and a better outlook than if you had never used credit. It can help you fight for lower interest on any loans you take. Even if you don’t need to use it, making payments using your credit card then paying them off soon after is a great way to build up your credit score bit-by-bit.
It can give you more
When people think about credit, they also think of it as a one-sided deal. You’re borrowing money and you’re always going to have to pay the interest, as well as fees for certain creditors. But the fact is that there’s almost always a way around those fees. It might involve negotiating with credit card providers but it’s not impossible. After all, they want you using their credit cards, the fees are just an extra. But finding the best card for rewards also makes sure that you’re benefiting in the long-term from this relationship just as they do. With better credit comes better rewards. These rewards can help you save money on flights with air miles or keep your daily costs back through cashback deals or vouchers.
You can always fight your corner
You should be taking a planned approach to your credit so that you rarely have to correct any mistakes. But it’s good to know that those mistakes can be rectified if you’re willing to work for it. First of all, even the blackest marks on a credit report will fade with time. But if you’re unsure of why your credit rating is so low, then the right to look at your record and dispute claims that are erroneous can help you immediately repair some of the damage on there. There are plenty of erroneous reports that often show up on your record, such as late payments when you actually paid on time or accounts that aren’t yours but ended up on your record.
Making proper use of credit is all about managing your expectations, hunting the deals that work to your advantage, and having a plan to always stay on top of your payments. If you can’t use credit responsibly, then you shouldn’t use it at all. If you can, however, you should make sure that you get all the benefits.