Is Your Credit Score is Low Because
You Want it to Be?
by Jennifer S. Matthews
people with low credit scores would quickly answer ďnoĒ.
However, the answer is ďyesĒ for the majority of people with
low scores or bad credit. Even though some readers are now
riled up and/or mad after reading the first two sentences, I
hope you will keep reading in search of a solution. Know
this: indecision is actually a decision to do nothing.
no secret how bad credit or low credit scores can
tremendously hurt people and their families. However, most
people do not know there are steps they can take to actively
change their credit scores! I understand that some credit
problems are due to medical bills and marriages that ended
badly. Some people also had very affordable 30 year fixed
mortgages and then had a significant reduction in income
that led to late payments, short sale, or foreclosure. Yet
most people do not fall into one of these situations.
Instead, their low credit scores are primarily due to poor
spending habits, not budgeting, a lack of an emergency
savings account, and co-signing and/or providing financial
support for family, friends, and significant others outside
it comes to family, friends, and significant others,
historically African Americans often provide a tremendous
amount of financial support to these groups of people.
Undoubtedly, each of these groups of people holds a place of
significant importance in our lives. The problem is that too
many people put themselves in financial jeopardy to help
others who may or may not be doing all they can to truly
help themselves. Know this: if the roof over your head,
utilities, and other necessities for your life are not
covered, you are not in a position to financially help
someone else. However, there are non-financial ways you can
help people who are important to you, including researching
and connecting them community resources (local government,
non-profit, etc.) that can help.
Step One: Stop the bleeding! If you overspend and/or do
not live on a budget, write a budget and stick with it to
stop your own self-financial damage. There are numerous free
resources on my website to help you,
www.MoneySmartBook.com. The other place to stop the
bleeding is with family and friends. Be honest! Tell them
that you really cannot afford to continue the financial
support youíve been providing but that you will help them
find resources they can follow up on to help change their
Step Two: Make a commitment to yourself to pay your
bills on time and then stick with it! Paying your bills on
time is 35% of your credit score. I fully understand that
you may not be in a position to pay all your bills on time
right away. If thatís truly you, choose one or two bills
(preferably rent/mortgage and gas/electric) and start
faithfully paying them on time every month. As you tweak and
get comfortable with your budget, you will start having
extra money that you can use to pay additional bills on
time. Once you start paying bills on time donít stop! Again,
on time payment is 35% of your credit score and in about a
year of consistently paying the same bills on time you will
start to see your credit scores rise.
Step Three: Look for ways to cut your expenses, which
is the premise of my book. How can you cut your utility,
cell phone, and cable bills? Most people who do a little
digging and research can lower these bills by a total $100 -
$150 each month! Then, each month put half the money created
into an emergency savings account and use the other half to
start paying an additional bill on time.
is just a start and itís admittedly harder to change bad
spending habits that it is to continue the status quo. If
you can get these three steps under control there are more
steps you can take to accelerate increasing your credit
scores. The most important thing is to get started!
quick story about me: Iím quickly approaching the magical
age of 50. About six months ago, I decided to get braces and
straighten my teeth for purely cosmetic reasons. Thatís not
a common step to take at my age, and Iíll wear them for
about 2 years. Looking ahead, two years will surely come and
go. I could do nothing and still have crooked teeth in two
years, or I could take action and have straight teeth two
years from now.
the same lines, you can commit to making some hard decisions
and taking some tough steps now so that youíre not as
financially stressed two years from now, or you can keep
doing what youíve been doing and still be in your same
current financial position, or possibly even worse, in two
years. If your credit scores are low and you choose not to
start working toward making a difference such as with these
three steps, then the article title applies to you and the
decisions you have made regarding your credit scores.
Remember: indecision is actually a decision to do nothing.
About the Author: Jennifer S. Matthews is an
award-winning author, motivational speaker, and is trained
as a financial coach. Her award-winning book 12 Ways to Put
Money in Your Pocket Every Month Without A Part Time Job,
was also nominated for a 2013 NAACP Image Award. The book
shows readers how to create hundreds of dollars in cash
every month from within their existing income. Visit
Jennifer online at
www.MoneySmartBook.com and sign up for her newsletter.
You can also purchase her book, take advantage of free
downloads, and much more.
© 2014 Creating Financial Literacy, LLC