Every day, people work to survive the struggles. They get themselves jobs so that they can provide for the daily needs of their family. Some people even have second jobs to make ends meet. However, others would say that all their efforts are just not enough. Even with the best of their efforts, they still do not have enough money. And so, others would resort to having debts which often result in the need for an IVA.
Debts are fine as long as you can still manage in paying them and also that you do not need to borrow money just to pay another debt. When you do not know how to manage your finances such as having too many debts, or not paying your monthly dues, and even trying to forget about your credit card, you are getting yourself into trouble by being labeled as someone who has “bad credit.”
When you have bad credit, you cannot easily get a loan especially when you need to. Moreover, some people even cannot apply for a mobile phone plan, or worst you cannot get hired. Due to technology and the internet, everything can be checked even your credit. So, it is important to avoid having bad credit and here are the effective ways on how to avoid it.
First, it is very important to have your own savings account. A lot of people would say that their savings account is usually their hero when it comes to difficult times in finances. Others would also call it as their emergency fund. By having a savings account, you do not have to borrow money, especially from the bank or loan sharks because the interest is extremely high. You can save at least 5 to 10% of your monthly income.
Second, you need to pay your monthly dues on time. You may not see it coming, but when you do not pay your monthly dues, you tend to have more obligations a month or two after. Though the phone bill is a small thing, it can contribute for you to have bad credit.
Third, be cautious in using your credit card. There are so many who would resort using their credit cards because they want to earn points or even miles for travel. However, people usually have problems with their credit cards when they overuse them, but they do not know how to pay the bills monthly. If you just pay the minimum amount, it will not help because the interest will only go bigger and bigger as the months come. So, think before you swipe.
Lastly, do not attempt to have loans or debts if you cannot afford to pay them or else, you will fail and will end up in your problems. Be responsible enough for thinking about how to get out of your monthly dues and do not start up new ones. If there is no choice for you but to have a loan, it is best if you go for something that has a lesser percentage or best if you borrow from family or friends. They will most likely not charge you up for interest.
Overall, financial management and discipline are the keys to avoid bad credit. If you have both, surely you know how your cash flows properly, and you will have fewer problems when it comes to your finances. If you know how to discipline yourself, you have better things to do, and you do not get problematic about debts or even looking money on how to pay them off. If you succumb to debts, you have no one to blame but yourself.