Consumer Credit and Financial Security

 

When you hear the word “credit” I know that you are quite intimidated because of credit cards, loans, etc. But did you know that credit can be a successful financial management tool? By using credit, it allows you flexibility in managing your budget to purchase goods and services when they are needed the most. It can even allow you to invest in stock trades like dividend stocks. There are loan companies that offer this kind of benefit where the loan is not limited to only one item such as car and house. Consumer loans give freedom to diversify the money that you will receive from them. You can even compare loans without collateral. A consumer loan, also known as a private loan has no security requirements. This means that the bank does not require a mortgage on a home or car to grant it. Hence, you are free to dispose of the money as you wish.

 

Consumer credit, in general, takes many forms such as installment loans, credit cards, department store revolving charge accounts, home equity loans, and other kinds of time payment plans. Wise consumers keep credit use at a safe, manageable level, but this is difficult because reading contracts can be confusing and calculating the actual cost or finance charges requires knowledge and math skills

 

It is okay to apply for a loan and credit card. Just remember the ff:

 

-Follow your budget plan.

-Shop for the lowest total finance charges.

-If you a credit card, establish a debit limit.

-Credit contracts should be read carefully and questions answered before you sign.

-Do not depend too much on to pay for day-to-day living expenses.

-Always pay your bills on time to ensure that you can continue to use credit and have a good credit line.

-Credit is best used for items where their value will outlast the installment payments.

 

Credit management strategies can be used to:

-Avoid the overuse of credit

-Lower the total amount of debt

-Shorten the term of debt

-Reduce interest and finance charges paid for the use of credit.

 

Periodically, get a copy of your credit report and check it for accuracy and completeness. This is especially important before making large purchases where you plan to use credit, such as for a car loan or a mortgage. In many cases, credit reports have minor inaccuracies that need to be corrected. Sometimes there are errors that might result in your being turned down for a loan (to correct an incorrect credit report, use the form provided by the credit reporting agency)