Sunday, 14 June 2015

Revving Up Your Credit Score

Organize and Optimize Your Credit Cards

Optimize Credit Card Use
Keeping your credit score optimized is essential in the ever evolving age of technology. Why? This is how cash flows... through the means of electronic transactions.
“Canadian enterprises sold more than $136 billion in goods and services over the Internet in 2013, up from $122 billion a year earlier. As in 2012, wholesale trade, manufacturing and retail trade accounted for the majority (61%) of the value of e-commerce sales." - The Daily, Wednesday June 11, 2014
Given that a vast majority of retail trade occurs through the World Wide Web, this gives a pretty clear indication of the amount of transactions that occur through credit.  

Credit Can Help You Become Rich

Picking supposedly great investments or distressed property is the big focus in the media to hype up ways to get rich, these routes of getting rich are often elusive to a large part of the population. 

I can't recall last time I had a large wad of cash just sitting in my pocket where I could drop it at a moment's notice to pick a great investment or a distressed property to bring it up to code and flip it for an even bigger chunk of change.

Something that is often ignored, but has the potential to make you rich in the long run is your credit score. Now I realize that this may be so simple and basic that you're probably sitting there thinking is this guy for real? That being said.. establishing good credit is the first step for building an infrastructure to getting rich.  

The essence of this matter is simple, if you think about it. How do we make our largest purchases.. CREDIT! If you have a really good credit score you can save tens of thousands of dollars on some of your major purchases. Therefore, this is the benefit of optimizing our credit when it comes to saving money and getting on our way to generating positive cash flows from these interest savings, that we can invest with.

The interest savings created through a good credit score give us a great advantage when it comes to building our nest egg, whether for retirement purposes or simply to "live on your own terms" if you will. 

The Unraveling of The World's Credit

Credit Crunch Unravelling
In essence, what much of the world witnessed in 2008, was the unraveling of credit due to loose standards of practice. These personal spending habits that were based on second and third tier lenders handing out fictitious unsubstantiated credit and unequivocal home equity loans that could not be collected on was in large part the essence of the 2008 credit crunch.

Your Credit Score vs. Credit Report What Does It Mean? 
Your credit score is a snapshot of your financial health , at a specific point in time. It creates a picture of risk or liability if you will, to your lenders in comparison to other consumers. Credit reporting agencies use a scale from 300 to 900, the higher the score on this scale the better.
Additionally, it is up to the lender`s discretion as to how low of a credit score they are willing to accept. Nothing is set in stone as the lender is liable for the money they have lent to you, if you are not able to repay the balance owing. It should also be noted that your score will also determine the interest rate you will pay, once again the higher the score the lower the possible interest rate.

Your credit report is the summary of you credit history, this has occurred if you have ever taken out a loan, bought items through a credit card or been involved in one of those buy now - pay later type of deals. I do not personally recommend the buy now - pay later deals unless you`re a very conscientious and strong will powered individual. I would assume that many of you know what I am referring to, as many of us have been in this type of situation especially when being younger in age. Staring at a d-day of repayment, but being far too young and wanting to have fun in the moment.  This for many, is where the true unraveling of the personal credit crunch begins.