While access to credit enables us to carry these kinds of debts, they hurt our ability to gain more access to credit - so the big-screen television you buy today could well be the one thing that prevents you from getting a mortgage on the perfect house next year.
"Mom," my daughter said as she stood by my desk recently waiting for one of her homework assignments to print from my computer, "Did you pay this bill? It was due Oct. 4." She asked me this on Oct. 14. And no, I hadn't paid it.
Keep the real reason in mind. What's the real reason you want to work on your credit? No, it's not so you can get a good credit score. That's a good reason and an important one but it's not the REAL reason.
True. Good credit scores can help you qualify for money when you need it. That's a great reason and probably the best known of them all. But there are other reasons that you should seriously work on your good credit and some of these might surprise you.
Of course it's important to do what you can to bump up your credit score. But many people use the wrong tools towards that objective even though they have the right motivation. And when they do, they actually worsen their credit rating rather than improve it.
Consumers face a "catch-22" situation when it comes to loans. On the one hand, it's important to shop around to get the lowest interest rate you can. On the other hand, there's the perception out there that shopping around for loans too much will hurt your credit.
It makes sense to shop around for the lowest possible interest rate you can qualify for. However, consumers are also aware that inquiring too many times on a loan can have a negative impact on your credit scores (ultimately increasing the interest rate that you pay!)
Credit scores are based on how someone has historically handled credit. So although they won't be a perfect indicator of whether your new partner will be a good partner, a credit score can hint at their ability to manage responsibility, and whether they have habits that can hinder the relationship.
"I served in the military for 30 years and received the highest level security clearances," said Brooklyn resident and war veteran Emmett Pinkston. "Yet I was turned down for a job as a TSA baggage screener, because of a bogus charge on my credit report. I found myself stuck at a low paying job."
One of my clients called me in a panic recently. He was reviewing his credit report and saw a credit item listed in collections that he didn't recognize. Had his identity been stolen? Was a creditor trying to pull a fast one on him? He wasn't sure what to do. Was his credit report rife with errors?
In the weeks leading up to the election, we've seen a lot of press coverage -- both good and bad -- about each of the candidates. Obama's and Romney's campaigns can actually teach us some lessons about credit.
There is nothing wrong with credit agencies making a profit. They are private businesses. Yet without adequate oversight, these agencies have little incentive to ensure the accuracy of consumer credit reports.
When your doorbell rings, you might pretend to be scared by a group of kids wearing ghost costumes. And you'll hand out candy and have a lot of fun. But the ghosts you should really be scared of are the ones who never ring your doorbell... the credit ghosts!
Our schools play an important part in educating our children but they don't teach them everything. As parents, you will want to give your kids a head start in life by teaching them about credit before they leave the nest.
By the way, if you decide to relocate to one of the countries listed in this article, you'll have to start over and build a new credit rating there. Credit data from the U.S. is not shared internationally, or vice versa.
The information in your credit reports is what's used to create your credit scores, so you don't want to let mistakes on your credit reports potentially throw your credit scores out of whack. Here's how to dispute credit report mistakes, step-by-step.