Establishing LuxuriousCREDIT is a goal that takes both time and effort. Just like Rome, good credit is not built in a day. But with consistency, planning, and responsibility it can be accomplished. Part of the challenge of establishing and maintaining a healthy credit score is simply getting started. It can be difficult to establish new credit when you have little, or no existing credit. It can also be very difficult to get approved for new credit when your current credit history is poor.
The LuxuriousCREDIT 21 Day Challenge is designed to kick start your financial fitness and put you on the path towards meeting your money goals. Breaking old bad habits and making new and better ones is the purpose of this 21 day fast. By challenging yourself to abstain from spending patterns that can be toxic to your economic wellbeing you have the unique opportunity to develop better rituals which can be translated into tangible results.
For the duration of the LuxuriousCREDIT 21 Day Challenge participants are encouraged to abstain from establishing any new lines of credit. The establishment and use of credit, if not handled properly, can quickly lead to debt and poor credit which is the exact opposite of what this 21 Day Challenge is all about. Once you are ready to branch out and build up your credit here is what you will need to know.
The Ultimate Catch Twenty-Two
Imagine the following scenario...You’re fresh out of college and excited about venturing out into the “real world” all on your own. You want to make your first major purchase and decide to go ahead and finance it. The only problem is you can’t seem to get approved. You’re being told again and again that you are not eligible for financing because of a lack of established credit history. Likewise, you can’t establish and show any credit history without someone being willing to extend credit to you.
This is an all too common dilemma for young people desiring to begin building LuxuriousCREDIT and planning for their futures. People in this situation are often referred to as having “No Credit”. There are a few smart ways to get over this hurdle. By starting small and working your way towards increasingly longer lines of credit, you build the creditworthiness over time that lenders are seeking.
Types of Credit
There are several different types of credit to be aware of when building or re-building your credit. The types range from installment to revolving, open, secured, and even unsecured. Each type of credit serves a different purpose and performs a different function for credit building purposes. You can click here to review a detailed list of some of the most commonly used types of credit.
Once you’ve finally secured a loan, been approved for a credit card, or received financing for a large purchase manage your credit properly. Be careful to pay on time, every time. Get into the habit of paying more than the minimum monthly charge. Review your balance, charges, and statements meticulously. Charge or finance only what you know you will be able to afford to pay off. Pay off your previous balance before charging new items. These are simple ways to use your credit wisely and keep your credit thriving.
Checking and Savings Accounts
You may be surprised to learn that even though checking and savings accounts are not actually a line of credit they do hold weight when it comes to getting financed. Having a checking or a savings account, preferably both, shows potential lenders that you are financially responsible and trustworthy. In some cases this may sway their decision in favor of doing business with you. Keeping your bank accounts in good standing, avoiding overdrawn balances and returned checks may not technically be credit building but they certainly are credit promoting. Always manage your bank accounts with caution and care.
These tips, along with the other steps in the LuxuriousCREDIT 21 Day Challenge, will have you on your way to financial freedom and economic empowerment. If you are not exactly ready to jump into the entire 21 Day Challenge with both feet, feel free to choose one component such as this one, Newly Established Credit, and begin there for as long as you feel comfortable. You will inevitably begin to see results and want to continue. Do it for you, do it for your future, do it for LuxuriousCREDIT!