Proper financial management is crucial in obtaining significant dreams in life.
Purchasing an automobile or applying for a mortgage to secure a home are moves that require adequate savings and a desirable credit score.
Still, it’s essential to learn how struggling to reach these goals impacts your credit score once achieved.
Rod Griffin is an expert at Experian, 1 of the 3 primary credit bureaus. According to him, US citizens must understand how reaching the following life milestones can affect their credit.
1. Graduating off campus
Completing campus is a big deal, especially if you took out student loans to fund your education.
“Paying off your student debt is an excellent way to start building credit,” says Griffin. “On top of lengthening the average lifetime of your credit accounts, student loans are considered installment loans and can help increase your credit assortment.”
Like other credit types, acceptable loan settlement practices like timely payments can build credit while poor habits can ruin your credit history.
2. Splitting Apartment Bills with a Roomie
Sharing an apartment is an excellent way to cut spending, but the consequences can be detrimental if your mate doesn’t hold their end of the deal.
All names included in a utility bill or lease may suffer credit harm if a payment is overdue.
“Though many utility firms don’t report credit performance to the 3 primary bureaus, falling late behind schedule may trigger a call for collections and have an impact on your score,” Griffin says.
3. Launching a business
Though desirable credit gives you an upper hand, one can still launch a startup or acquire a commercial loan even with a poor score.
Bad credit mustn’t stop you from chasing promising business opportunities,” Griffin advises.
For wannabe entrepreneurs with bad credit, looking for a co-signer is a smart way to get access to personal loans to get your business running.
While doing so, keep a recording of timely utility bill payments to start appealing to lenders.
And once your business kicks off, start building business credit. Always keep personal credit separate from business credit because credit bureaus consider the accounts different.” Griffin says.
Griffins also cited divorce as a life milestone that can affect credit scores negatively.
An emotionally-disturbed individual can easily fall back on payments and negatively affect their credit status.
“If you sense a divorce, start getting your finances in order, and automate most bill payments to avoid delays that can harm your score,” he advises. “This is the time to seek financial advice, as one can easily bring down their financial life along with their love life.”
Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners get a business cash advance. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.