January 27, 2006, Newsletter Issue #1: Say Goodbye to Bad Habits

Tip of the Week

Most people who find themselves in bad credit situations are that way because of bad habits. Identifying bad habits is the first step to rectifying your credit report. Do your fingers go to the plastic when you are out at dinner or to the paper? Are you unable to refuse financing offers that come with signing up for a new credit card?

These are just two bad credit habits that many people fall into.

Here are the ways to break these, specifically. It is understandable why many people choose to carry a credit card. They were not invented for everyday expenses and many people still keep them only for emergencies. If you suffer from the first bad credit habit that was mentioned above, ask yourself next time; Is dinner an emergency? Usually it is not and should not warrant the use of a high interest credit card. Even if you pay your balances off, daily interest can be a killer on those small transactions that sneak in. The best solution to this is to cut your cards up. However, as I said, it is understandable why you would keep one around. Just keep it limited to 1 and don’t let your fingers pull it out unless it is absolutely necessary. When it comes to those special financing offers that come in the mail from every bank and retail store around, do yourself a favor - steer clear. Sure, there are always better rates and offers coming, but many people do not realize that by constantly moving your credit around, you are actually hurting your score. Most mortgages require having a few lines of credit that have been active for over a few years. If you are always getting new cards and canceling old ones, you will fail to meet this need and your credit will suffer overall.

To fix bad credit habits you need to fix the way you look at credit. Acknowledge that the problems exist and start taking steps today. Consult with a professional to see how to stay on the right path once you have fixed your bad credit habits.

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