Don’t Go in Debt to Improve Your Credit Score!

In the last twenty-some years, there has been a transition in North America. People used to judge their financial worthiness by how much money had, and now people are merely focused on how great their credit score is and how good they look. People think that as long as they can make their payments and can keep their credit score looking good, they can continue to borrow money as much as they please. It is certainly an interesting reflection on how America has changed in the last few decades. Quite often young people are even told to borrow money that they don’t need to just so they can build a credit history. Is this the smart thing to do?

Let’s take a moment and think about this. When you take on a debt and pay at least your minimum payments, your credit score will improve. You will also become a lender’s best friend, because they love people who will borrow money at high interest rates and then pay that debt over a long period of time. You will certainly improve your credit score, but you shouldn’t take on additional or new debt to do it.

I’ve heard a number of stories from other college students and people just starting their financial life about how they took out a loan from a bank, opened up a credit card, or took on some sort of debt so that they could improve their credit score. There are a number of reasons why you shouldn’t borrow money to improve your credit score. The first is that you shouldn’t establish patterns of consistently borrowing money when you are just starting your financial life. Rather, you should establish habits of saving money, and paying cash for things once you save up enough money. You shouldn’t let yourself fall into the myth that you will always be in debt and always making payments on things such as a vehicle, furniture, or a home.

The other main reason that you should not borrow money to improve your credit score is because doing this is the equivalent of paying a fee to improve your credit score. You can’t really quantify how much money you will save by improving your credit score for future loans at all. Thus you are giving in money for the possibility of getting more out later, this is called gambling. It’s a fool’s game. You never know whether or not it’s actually going to be worth it to get that credit card or other loan.

When all is said and done, it’s just not worth your while to actively try to improve your credit score by borrowing money and paying it off. Instead focus on building wealth and actually having some money, rather than what some company tells you is your credit worthiness is.

Cash Advance Loans

Cash Advance LoansFor people who find themselves struggling to get through the month in terms of finances, a cash advance loan is the answer. Above all else, it’s important to understand that this is a short term loan. It’s designed specifically to help individuals who are in need of quick cash without hassles.

The process of getting a cash advance loan is pretty simple. You find a company that specializes in these type of loans, provide them with your credit details and salary along with the date you usually get paid. From there they calculate the amount you qualify for.

When you get paid at the end of the month the amount you loaned is paid back in full. This is the dynamic of this loan and it can come in handy, especially if you find yourself in an emergency.

Many people think they won’t qualify for such a cash loan, simply because they might be blacklisted, but there are institutions that will help blacklisted individuals. However, it comes with different terms and conditions. These terms and conditions consist of higher interest rates. Given that the institution is taking a higher risk, it’s only obvious that they charge higher return.

But before you ever make any loans, always make sure you are in a position to pay it back. If you don’t have any credit record problems keep it that way, because it hinders your chances of getting financing anywhere. As you take out the cash advance loan calculate whether it can suite your budget at the end of the month, otherwise you will only find yourself in deeper trouble.

For those who are already blacklisted, take this opportunity to rebuild your credit record. Make the payments as promised and slowly work your way out of your financial crisis.