Have you ever wondered if only rich people have awesome credit scores?
Wonder no longer. The truth is you don’t have to be rich to have an awesome credit score. You just have to learn to live within your means.
The ironic thing is that people who don’t have good credit are the ones who wish they had good credit scores while those who have awesome credit scores usually don’t care because they don’t want to borrow any money. Part of the reason for this is that people with the very best credit have usually learned to work with what they have. If they don’t have the money they need to buy something they want, then they don’t use credit to buy it. They save up first, and then they buy—but only when they have the money. If they do use credit, they will only use a small amount of credit that they know they can quickly repay.
Steps you can take to create a fantastic credit score
If you have a poor credit score, you can eventually turn your bad score into a great one by following the tips listed below. We know it is easier said then done, but here goes . . .
- Pay all of your debts on time each month and never be late.
- Have two or three credit cards report on your credit bureau. A line of credit will also help but is not necessary.
- Have reasonable credit limits available to you on your credit cards and line of credit, but don’t use them (or hardly use them).
- Don’t apply for credit too often.
- Do all of the above over many years and your credit score will be amazing (the only catch is if you have late payments or other negative information reporting on your credit bureau right now, this bad information will need to fall off your credit bureau before your credit rating can soar. It can take 6 to 7 years from the date bad credit occurred for the negative information to fall off your credit bureau).
- Learn to live within your means without using credit. If someone took away all of your credit cards and your line of credit tomorrow, how would that effect you? Would your life continue on just fine or would that really mess you up? You will never have an awesome credit score as long as you depend on credit. You have to break your dependency and learn to live on a cash budget. Once you learn to live on cash, and start making progress paying down your debts, your credit score will continually improve.
- Make living on a cash budget a life style choice. As the years pass and you pay on time and don’t charge much on your credit cards, you will feel better knowing that your finances are under control.