Your Credit Rating: Should you be concerned?
You hear talk every day about your credit rating. This is a topic that has sent many good people into a complete panic. They are even afraid to apply for loans or to even get phone service.
Some people may have a reason to fear the credit bureaus. However, not everyone should be as worried about it as they may have been. There is a range of which credit is acceptable-more acceptable than one may think.
Score Interpretations
This is a simple breakdown of credit rating breakdowns and what they mean. Keep in mind this is based on the FICO numerical credit rating evaluation scale (approximate value):
300 to 580-poor
581 to 619-fair
620 to 650-good
650 to 750-very good
751 to 800-excellent
801 to 850-perfect and/or A-1 credit
Keep in mind that the above score is approximately. Furthermore, keep in mind that certain lenders, landlords, phone companies, and utility companies have different standards. This is true as well with banks and credit card companies.
However, the problem with having fair or poor credit is that you are trapped into paying higher interest on loans and unsecured debts. This often keeps people with fair to poor credit in even further bondage.
This is often known as what is called the ‘credit treadmill’ and is a situation in which many honest, hardworking Americans are trapped. To make matters worse, honest people who normally are responsible can fall upon hard times.
Even people with savings and investment accounts and numerous assets sometimes eventually run out on recourses. This cannot be helped. However, in most cases there is more that people could do to prevent their credit rating from becoming damaged.
In spite of extenuating circumstances such as serious illness, accident, death, or other tragedy a person needs to do their part. A person cannot control every outcome in life. However, at least a person should find it within themselves to do the best they can with what they have.
Budgeting Tips
Since the possibility of ruining your credit rating and credit history is a huge issue it seemed fitting to share a few budgeting tips. Here are some ideas to get you started:
- Store up at least a few week’s worth of basic food staples. This will hold you over during leaner times. Some people even store maybe enough for a few months and buy in bulk.
- Set aside a small amount of money every paycheck for emergencies. Try not to spend every last penny you own.
- When purchasing more durable items such as a washer or dryer make sure it is going to last. Also make sure you do not lose the warrantee documents if you have it in case it breaks down.