Protecting Your Credit

There are multiple, simple things, you can do to protect your credit. The most basic is to check your own credit on a regular basis for information that is incorrect. By staying on top of your credit, you catch and correct issues that may arise well before any lender may see it.

If you are a single income household or a two income household on a budget, take advantage of credit protection programs that will pay your “Credit Cards”, “Installment Loans” and “Mortgage Loan” in cases of death, disability or unemployment.

Most of us think this will never happen, unfortunately, it happens to someone and poor preparation opens the door. The premiums are normally very reasonable for these programs and usually are based on a percentage of the amount owed.

Stay organized. If you are paying for programs, but something doesn’t happen for 3 years, you need to be able to know how to apply promptly. There is normally a waiting period for benefits to kick in, and you certainly don’t want to wait any longer than necessary because you “couldn’t find the information”. This could mean having to make another months worth of payments that would force you to dip deeper into your savings.

Control your debt by minimizing how much you owe. Avoid high interest credit cards, and pay them off as quickly as possible by paying as much as is reasonable.

A minimum payment can lull you into thinking you can afford more which tends to encourage people into spending more. Some credit cards are amortized over 40 years. Think about that the next time your payment comes due, then imagine this credit card debt following you around for possibly 40 years if you make no additional purchases and only minimum payments. A Scary Thought!

Save, save, save, save. Put as much as you comfortably can into a savings account every month, while still allowing you and/or your family to enjoy life. Once these funds reach 3 or 4 thousand dollars, you’ll want to seek advice from a financial specialist to insure this money is working for you while still being accessible in cases of emergency.

Saving isn’t and shouldn’t be a burden, it’s a habit like any other. Teach your children to save early and chances are they will carry that into their adult lifestyle.

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