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If You Like to Drive Nice Cars, Protect Your Credit

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On: Fri, Feb 6, 2015 at 1:31PM | By: Gary P Garry

If You Like to Drive Nice Cars, Protect Your Credit

They say that experience is the best teacher, and, for people like me, it has always been the only true teacher. What can I say, I was a rather wild buck when I was younger, and I always wanted to do things my own way.

Yes, I heard advice, and I had a little bit of common sense somewhere in the back of my head. However, my impetuous desires in any given moment tended to rule the roost, and I suppose this is true for many young people.

The fact is it came back to haunt me. Like a lot of people, I like to drive nice cars, and I had my chances early on. However, I did not take good care of my credit, and I went through periods when it was difficult for me to get financing.

This creates a snowball effect of negativity. You wind up buying something that you can pay cash for, and when you are young, you may not have much in your pocket. As a result, you're driving lemons, and that lemonade-making platitude just ain't workin'.

In fairness to myself, people didn't know as much about credit back in my younger days. Now there are numerous resources on the internet that you can tap into to find out your credit score, and you can access your entire credit report to make sure that there are no erroneous negative marks.

These days, I have righted the ship. A couple of my credit cards provide me with credit scores on an ongoing basis, so I am right on top of it, and I'm capable of getting the lowest interest rates when I make big purchases.

This can make a significant difference when your car payment is being calculated, and you can ultimately get far better value for your payment dollar if your interest rate is low.

Paying your bills on time is a huge factor as we all know, but there are others that are less obvious. Your credit is dinged every time you apply for credit. Even though you may get countless offers in the mail from people who extend credit, when you take them up on their offers, your credit score goes down.

Plus, you want to keep the utilization of the credit that is available to you as low as possible. This is called the debt to credit ratio. Because this is factored into your credit score, closing accounts with zero balances that you are not using will actually reduce your credit score. This may sound unfair, but it is a fact of life.

The next time you see your dream car driving past you on the street, take a mental picture. Going forward, when you are tempted to do something that is going to damage your credit, conjure the image, and keep your eye on the bigger picture.

If you act with prudence and restraint over an extended period of time, you can always be driving the car that you really want to drive. If you don't, you may find yourself behind the wheel of a not-so-fly 1994 Ford Aspire.



Stephy | 4:30PM (Fri, Feb 6, 2015)

Great article, the younger generations could benefit from some of these pointers.

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