Understanding More about Credit by DonaldQuixoteC


									Understanding More about Credit
As another year passes and another graduating class of future business administrators or healthcare
professionals in Cheyenne receives their diplomas and enters the “real world”, the issue of smartly
dealing with credit again surfaces. Credit card companies get excited with every new client that
misunderstands credit or is ignorant of how credit works and how to properly build credit.

Starter’s Guide to Credit
As these young people venture into the work world and into the complications of credit, both good and
bad, there are a few things that they should keep in mind. The first is the most basic fact of credit which
is that credit and credit cards are loans that will need to be paid off before their due date or the penalty
of interest will be applied.

                                                 Too often, credit cards are seen by young people as a way
                                                 to spend money they do not yet have. This is a
                                                 dangerous and often debt incurring thought process that
                                                 lands many people in financial trouble.

                                                 Instead, credit cards should be thought of as the micro
                                                 loans that they are. However, when used with care and
                                                 with responsibility, credit cards and credit can be very
                                                 beneficial to a person and, indeed, good credit is in fact a
                                                 vital necessity of adulthood.

There are many business students in Cheyenne who shy away from building good credit for a number of
reasons, one of which will be discussed shorty, but this should not be so. Having a good credit history
does far more than simply boost one’s credit limit or even increase the likelihood of receiving a loan,
although the loan alone would be a good enough reason to maintain a good credit score.

No, having good credit does far more than that. A good credit score can land people jobs, save money
on phone plans, pay lower insurance premiums, and receive lower interest rates on large expenses such
as a home loan.

Benefits of a Good Credit Score
With all the benefits of a good credit score, simply avoiding credit so that one does not have to worry
about it is itself a critical mistake. Instead, a college grad should simply strive to better understand the
intricacies of credit and build a quality credit score.

As mentioned before, one of the main deterrents to building good credit is simply incurring credit in the
first place. In many young minds, this is incorrectly translated as going into debt first before being able
to achieve a good credit score, which understandable scares some away from striving to achieve a good
credit score.
A person can build a good credit score without ever going into debt if they will take the small steps of
paying off their credit card every month without carrying a balance. By planning out purchases
according to available finances, a person can build credit by paying for charges to the credit card while
avoiding debt incurred from interest rates.

While it is true that often some debt will be incurred, like when granted a home loan, the debt that has
the ability to suffocate and drown a creditor can be avoided while still building a quality credit score.
Simple budgeting and wise finances with paying off credits before they are due will go a long way in
staving off debt while one builds their credit.

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