General Good Financial Habits Build Good Credit Scores

Dated: 12/04/2017

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General Good Financial Habits Build Good Credit Scores

Your credit score in some ways is meant to be a snapshot of your overall financial habits - especially your habits surrounding debts and other financial responsibilities.  Developing some good financial habits can help your credit score by putting you in a good financial position.  

Good financial habits will ensure that you don’t get into too much debt and that you are able to meet your financial duties easily.  There are a few financial habits that are especially credit friendly:

Learn to budget

One of the biggest reasons that people develop poor credit is overspending.  In many cases, this overspending is caused by a lack of budget.  A budget can tell you how much you should be spending on each item in your life.  This allows your financial life to stay nicely organized.  

Contrary to popular belief, a budget does not have to be constricting or boring or complicated.  Simply note how much you earn each month, and on a piece of paper, write down how much you really need to spend on savings, rent, utilities, food, personal care, transportation, spending money, entertainment, hobbies, education, and other items.  Make sure that you account for every expense. 

Then, simply commit yourself to spending that particular amount on each item on your list.  Of course, some expenses on your list will change each month - you may spend more on heating bills in the winter than in the summer, for example - but estimating can help ensure that you can meet all your financial responsibilities.

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