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Once you’re able to better manage your debt, you’ll have extra finances to invest. Investment can seem like a daunting task, but brilliant professionals can help turn your life around.
Before you can begin investing, it’s time to take control over your finances. It may seem like having one credit card and using it infrequently is a good financial decision. However, most credit scoring companies and lending agencies are more likely to lend to someone with a low or moderate interest rate when you have several credit cards with some activity on them. If you want to grow and maintain a good credit score, use your cards for a few purchases every month and always pay off the balance. If you’re unable to pay off the balance, a good rule is to always make sure you only use about 20% of your credit line on the cards. For example, if your card has a $1,000 limit, never keep a balance of more than $200 on it. Lending agencies, landlords, insurance agents, and even potential employers look for people who have a history of consistent and responsible financial management.
If you’re in a situation like many are where it’s difficult to pay down your credit cards and debt, you’re going to have to adhere to some strong self-discipline, but every sacrifice you make will be worth it in the long-run. Create a budget and cut out all unnecessary expenses, even things like the occasional fancy coffee drink or restaurant meal. You may have to explain to friends and family that you’ve made a decision to pay down debt, and that means that for a while, you’ll need to be much more conservative with your finances. Save up about $1000 in your savings account in case an emergency arises, and then dedicate every other extra bit of money you have to paying off debt.