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.

Short Term Cash Loan

Short Term Cash LoanMany people are turned off by the thought of getting a loan, even though they can be helpful. There are some things you must know and think about before you choose short term cash loans.

These fast loans can benefit you if you need a bill paid quickly but are short on funds, if your paycheck was short, or you just need the spending money. Here are a few things to think about before you decide if a cash loan will work for you and your family.

The first thing you must know is the interest rate. Many times short term cash loans come with a very high interest. Sometimes the interest is about half of the loan itself. The need for the loan sometimes outweighs the interest rate, but it’s necessary to consider the rate.

The next thing you must know is when you have to pay the loan back by. If you must pay it by your next payday, think about the other bills you must pay at the same time. Will you have enough money to pay it back and also pay all the other bills you have? If you don’t have what you need to pay it back, you may get stuck in the cycle of short term loans.

However, short term loans do come with great benefits. They can get you out of a financial bind, there is no credit check needed usually, and they are easy and fast. You can get the money usually the next day, but sometimes you can get it the next day. It’s important to think about the above mentioned points. If you can pay it all back at the same time and not get another loan, then this can be a huge help.