Always Have a Plan

Before you take out a loan, you MUST have a realistic plan to pay it back!  Often individuals take out loans to pay off other bills and put some cash in their pocket, but they have not put any thought into the size of the payments, term of the loan and the budgeting to see if there will be enough money left over to make the payments.  Then you are left looking for another loan to help pay off this loan…and so on.  It’s a vicious cycle that perpetuates itself and in the end your credit is left in shambles and you’re being chased by collection agencies which only increases the stress of your current situation.

Be Smart and Take Only What You Need

It’s important to be strategic when you take out a loan.  Make sure you are not going to put yourself in worse shape than your current condition and only take out enough to pay for or consolidate bills for items and services that you NEED.  Do not take out a loan for something that you WANT.  If you want to put yourself on the road to good credit, it’s important to distinguish NEEDS and WANTS.

Pay Your Bills On-Time…That’s when the Magic Happens

If you continue to make on-time monthly payments, your credit score will start to increase.  This will lead to larger loans, lower APRs and greater financial flexibility.  This is the positive feedback loop that ultimately leads to good credit!

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