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Thanks for participating in Using Credit Wisely workshop!
The ability to borrow money is an essential tool for modern consumers. Few people are able to make it through life on cash purchases alone. Credit allows consumers to have the goods and services they need today without having to pay for everything upfront.
Used wisely, credit can be an enormous benefit to you and your family. Used unwisely, however, credit can quickly become a terrible burden – one that threatens your big dreams while adding incredible difficulty to your everyday life.
All credit is either secured or unsecured and knowing the difference is important. Secured loans are backed by some form of property, such as a home or a car, while unsecured loans have no such backing. Your rights as a consumer will vary depending on what type of loan you’ve taken, so be sure to know what you’re getting yourself into.
Read: Establish an Emergency Savings Account for the basics on opening and building an adequate emergency savings account.
Read: Payday Cash Advance Loans for all the reasons why you should avoid this type of loan at all costs.
Read: Personal Loans among Family Members or Friends for important guidelines on lending or borrowing from friends and family.
Read: Five things you need to know about home ownership for some important questions you should ask yourself before you begin the home buying process.
Read: Unable to Make Mortgage Payments for advice on how to approach your lender if you run into financial trouble.
Read: Glossary of Home Loan Terms for a guide to the most important home loan terminology.
Read: First Time Home Buyers to see how to prepare for homeownership.
Because of the interest rate and fees associated with purchases made by credit, what may have seemed to be a small investment can quickly become a drain on your financial resources. A key part of using credit wisely involves understanding the true cost of credit purchases and loans.
Use: the calculator What will it take to pay off my balance? for an estimate of how long it will take you to pay off a particular debt after considering the payment amount, interest rate and remaining balance.
Use: the calculator How advantageous are extra payments? to see the benefits of paying off debt ahead of schedule.
Use: the calculator How much will my adjustable rate payments be? to get a handle on how much your adjustable rate loan payments will fluctuate.
View: Plastic Diets Make You Fat to see some of the dangers of overextending your credit.
Read: Glossary of credit terms for the definition of some common credit-related words and phrases.
Read: Choosing what credit card to get for some important consideration to make before opening up a new credit account.
For most larger purchases you don’t have much choice as to whether or not you should use credit. But smaller purchases are another matter. Consider the following before the next time you pull out the plastic.
View: Debit vs. Credit to see which card to use and when.
Use: the calculator Should I finance or pay cash for a vehicle? for a comparison of the benefits of financing a car versus coming up with the cash.
Whether you’re just starting out with credit or looking to rebuild after a financial setback, keep in mind the three C’s lenders consider in making all lending decisions: Capacity, Character and Collateral.
Read: How to Get Your Credit Report and Credit Score for details on how to obtain your credit report and credit score.
Read: How To: Credit Reporting Errors for the basics on detecting and correcting errors on your credit report.
Read: How to Reestablish Good Credit for advice on how to rebuild your credit after a setback has brought your score down.
Read: Understanding Your Credit Score to see how your credit score is calculated and what factors are taken into consideration.
Read: Good Credit Score for the basics on how to build and maintain a high credit score.
View: Best Gas Credit Card for tips on how to save money at the pumping by changing how you buy gas.
View: Co-Signing a Car Loan for a few points to consider before co-signing a car loan for a friend or family member.
The key to successfully managing credit for couples is to understand how your individual credit behavior affects both you and your partner. Make sure you and your partner are on the same page on all important financial matters.
Read: Divorce, Debt and Finances for advice on how to reassess your finances, post-divorce.
Read: Family and Household Finances for five crucial questions to ask yourself about your family’s finances.
Read: Just For You: Newlyweds to see the pros and cons of combining your finances or keeping them separate.
Read: Having a Baby: Personal Financial Planning for the steps you should take to prepare your budget for a new addition to the family.
Read: Consumer Credit Protection Laws You Need to Know for a list of laws currently in place to protect your rights as a consumer.
Read: Beware of Credit Repair Scams for information on how to avoid credit repair scams and frauds attempting to victimize consumers with damaged credit.
If you've assessed your financial plan and find you need assistance achieving your financial goals, MMI's certified counselors are here to help. Take the next step toward financial freedom today and schedule a free counseling session: Fill out a counseling form online or call 866.515.2227.
Interested in learning more about debt repayment? Listen to successful MMI clients, Sharon and Craig, as they share their stories about overcoming debt and achieving financial freedom.
The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.
Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.
The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.
The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.
The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.