The truth about credit
We live in a credit-based society so having bad, or poor credit, can adversely effect your ability to do things such as:
- borrow money
- rent an apartment
- purchase certain goods like phones, laptops, books
- Shop online
- purchase a home
- Lease or buy a vehicle
- Travel
Credit knowledge
The secret to having great credit is to use credit, but not let your credit use you. You also have to understand the difference between good and bad debt. What is Good vs. Bad Debt
| Good | Bad |
| Assets – Houses, Cars, Equipment, gold | Liabilities – Cell phones, Clothes, Jewelry, Bags |
| Business – Rental Property, Line of Credits (LOC) | Personal – Credit cards, Student Loans, bills |
| Investments – Stocks, Bonds, Savings, etc | Lifestyle – Fine dinning, debit cards, Checking Accounts |
Maintaining a great credit profile
Credit Vs. Fico
You credit is you average score point on a credit bureau like Experian. This go run from a very low score of 450 and all the way up to a high credit score of 850 points. However, your FICO is your overall score on all three (3) credit bureaus such as Experian, Equifax, and Transunion. The simple fact is that most people go through life without realizing these critical facts. It is very critical to fully understand your credit-file because this could be the difference between having good vs bad credit, and understand how banks view your credit worthiness.
Understanding your credit-worthiness, and how banks see you as someone that can be trusted with money goes a very long way in building the stepping stones you need to reach financial independence, and even building real wealth and retirement. Unfortunately, most people go through life without understanding personal credit and end up becoming discourage when their personal credit takes a hit and they find themselves living with bad, or poor credit. And it is also important to understand Business Credit as well.
As you get older and your career begins to thrive, and your income steadily increases, you may finally decide to become an entrepreneur and start your own business. But did you know that one of the main ingredients to becoming a successful entrepreneur starts with also having great credit. The honest truth is that good personal credit leads to great Business Credit (FICO). And this is where you wanna be as an entrepreneur once you begin to acquire tangible business assets in your name.
Secret tips to great credit
- have only one legal address,
- make sure you name is spelled correctly,
- remove bankruptcies,
- remove child supports,
- know who is reporting to your file always
- consider doing a credit-sweep
- have no late payments
- Have no more than 3 inquiries
- You must not have a thin file – having less than 6-8 tradelines