Credit Repair Blog and Resources

Parents have a long list of responsibilities that range from being a caregiver to being a child's most trusted friend. Fortunately, most parents accept these many responsibilities because they know their children are counting on them. However, that doesn’t mean parents have everything covered. They may have forgotten to put one vital thing on their checklist: their children’s credit management. You might be wondering how you should manage your child’s credit. To provide some insight, we asked credit, finance, and scam experts to explain what they want you to know about your children’s credit and what you can be doing now to give them a solid credit path. James Garvey, CEO and Co-founder of Self Lender “When it comes to your child’s credit, there are two things you can do for them that could help them out later in life. First, teach them about credit — what it means, how it works, and how they can build it. Unless they go into finance, this is not something they currently learn at school, even though it could impact their entire adult life. So it’s crucial to teach this lesson at home. If you have great credit, look into your options for adding your child as an authorized user on your credit card. Many credit card providers allow this, and some don’t even have a minimum age requirement for the authorized user. Your child doesn’t even have to use your credit card to benefit from being an authorized user, so you can wait to give them a physical card until you believe they’re able to manage it responsibly. This means you could start helping your kid build credit before they’re legally old enough to open a credit account on their own at the age of 18.” Sean Messier, Credit Industry Analyst at Credit Card Insider “Children’s credit is a topic that’s easy to overlook — after all, how many kids are whipping out credit cards on their own? But, as I’m sure you know, the reality isn’t quite so simple.According to Javelin Strategy & Research, more than one million children fell victim to identity theft in 2017 alone. Left unaddressed, such issues could be disastrous for a child’s financial future. Fortunately, regularly monitoring your children’s credit can help you keep on top of these types of dangers.Your children are unlikely to have credit in their name unless they’ve fallen victim to identity theft. Because this danger is so widespread, be sure to check your kids’ credit reports regularly. For added security, you can freeze your kids’ credit reports with the three credit bureaus — Equifax, Experian, and TransUnion — to prevent credit accounts from being opened in their names. Under federal law, inquiring after and freezing kids’ credit reports is free.Once you believe your children are old enough to start building credit, consider adding them as an authorized user on an existing credit account.With many credit card issuers, you can add children as authorized users for an existing account, allowing the activity from that account to appear on their credit reports. You don’t even have to give your children authorized user cards if you think they’re too young. Just make sure you always use the account responsibly to avoid damaging your kids’ credit.As your children grow, be sure to educate them on the fundamentals of budgeting and credit. These topics aren’t always thoroughly addressed in school, and the best way to prep your kids for a bright financial future is by making sure they have the necessary knowledge.” Todd Christensen, Education Manager at Money Fit and author of Everyday Money for Everyday People “The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 not only permits American adults to place a freeze on their own credit report, but parents may now do so for their children 16 years old and younger. This would also apply to legal guardians and their charges. I never recommend that parents push their minor children and even their college-age or college-bound children to get their own credit card. Parents should first consider requesting an authorized user card for their children on the parents’ account. The child does not even need to use the card (or know it exists) to reap the benefits of the parents’ good credit. Here are my four rules parents should teach their children to abide by before applying for a credit card: Have regular income for a year. Create and live by a budget. Build and maintain a savings fund that would cover your housing, utilities, food, transportation and cell phone bills for three months. Use a debit card for 12 consecutive months without having a purchase declined or without using overdraft protection.” Kyle Kroeger, Founder and Money and Personal Finance Blogger at Millionaire Mob “It's never too early to start monitoring and building your child's credit. I suggest that you don't freeze your child's credit and instead you start building it up as much as possible and as early as possible. This is age-dependent, of course, but as your child enters into teenage years, you should consider adding them as an authorized user to your credit cards. This can teach them proper spending, budgeting, and repayment. Keep a close eye on it over time. You certainly don't want to rack up a large amount of debt. Only allow the amount that you can afford to pay off in full at the end of the month. “... a parent should educate their kids about credit, including how it works, why it is important, and what it means. Secondly, parents should think about the practical use of their child's credit. Allow for them to have some freedom in putting their best practices forward from what you taught them about the importance of credit. This will help your child stay disciplined in building their credit score through credit mix, a track record of repayment, and sound utilization.” Mark Huntley, Co-founder of Credit Knocks “Your child's credit will be very important to them when they reach 18 and as they get older. It will be important to you because if they have good credit, you will never be asked to cosign for loans, apartments, cell phones, or mortgages. Identity theft of children is very common as these types of fraud can go undetected for years. As a parent or legal guardian, you can freeze your child's credit up until they reach the age of 16. To remove any chance of future problems, it is a good practice to freeze your child's credit at an early age until they are ready to begin using it. When they reach the age of 16, you can add them to be an authorized user on your credit card accounts which will start building credit history and a credit score.” Jacqueline Devereux, Credit and Finance Expert at SproutCents “While a child is not eligible to become an authorized user on an account until the age of 15 and open up an account until the age of 18, they are at risk for identity theft at birth. Children are easy targets and all a thief needs is to get a hold of your child's social security number to start opening accounts. Under the Economic Growth, Regulatory Relief and Consumer Protection Act enacted in 2018, credit freezes are required to be free. You would need to put a credit freeze with all three of the major credit bureaus, but it would be well worth the hour it would take. You can be saving your child years of overcoming bad credit, legal fees, and hours trying to recover their credit.  Monitor their credit reports through the three major credit bureaus. You can check your child's credit report during a freeze. Keep the freeze on until your child needs to apply for student loans." Steve Weiseman, Lawyer, College Professor, Author, Identity Theft/Scam Expert at Scamicide “Child identity theft has grown as a problem in recent years. According to Javelin Strategy and Research, a million American children became victims of identity theft last year at a cost of 2.6 billion dollars in total losses to the families. Children have become a prime target of identity thieves who, if they are able to get identifying information on a child, such as the child's Social Security number, can open a credit report on behalf of the child and obtain credit in the child's name. The identity thief never pays back the money accessed through the child's credit and the child is burdened with a bad credit report that can have a harmful effect on the child when he or she applies for credit, applies for a job, applies for a scholarship or seeks to rent an apartment.  Often the identity theft is not discovered until years after it first happens which makes it more difficult to remedy.Last September, a new federal law went into effect that permits consumers to freeze and unfreeze their credit reports for free. You can now freeze and unfreeze your credit at each of the major credit reporting bureaus at no cost. However, also important is that this new law was the first national law to protect children from identity theft. Parents can now create and freeze credit reports for their minor children. Child identity theft has become a major problem and until now only 29 states permitted the establishing and freezing of credit reports for children.Now for the good news and bad news. The good news is that the process for freezing your children's credit reports at Experian and TransUnion has gone well. The bad news, however, is that our dear friends at Equifax, whose negligence exposed Social Security numbers and other personal information of 143 million of us (including myself), have made it very frustratingly difficult to freeze children's credit reports as expressed by Congressman Patrick McHenry of North Carolina at a recent Congressional hearing.Here are links to the three major credit reporting bureaus with forms and instructions for freezing your children's credit reports: https://www.transunion.com/credit-freeze https://www.experian.com/blogs/ask-experian/requesting-a-security-freeze-for-a-minor-childs-credit-report/ https://assets.equifax.com/assets/personal/Minor_Freeze_Request_Form.pdf Unlike freezing your own credit reports, children's credit reports must be done through the mail. Remember it is important to freeze your child's credit report at all three major credit reporting agencies and although it is difficult to do at Equifax, it is still important to do so.Once you have frozen your children's credit, be sure to keep the PIN and information on how to unfreeze your credit reports in a safe place.” Leslie H. Tayne, Author of Life & Debt and Financial Debt Resolution Attorney at Tayne Law Group, P.C “Unfortunately, children can be victims of identity theft. This is becoming more common because it is more difficult to detect. If there haven’t been any signs of suspicious activity with your child’s credit, you may want to check their credit for the first time around the time they turn 16. However, if there have been red flags — credit card mail or phone calls for your child, for example — you may want to check their credit report. You can request a report from any of the three credit bureaus (TransUnion, Equifax, Experian). Children under 13 should not have a file with the credit bureaus, so if your child has a file, identity theft has likely occurred. As a result, freezing your child’s credit may not be a bad idea. This was not an option until last year when the federal government signed the Economic Growth, Regulatory Relief and Consumer Protection Act, which required the credit bureaus to issue free credit freezes for children under 16. Freezing your child’s credit can be a hassle, particularly if your child doesn’t have a credit file yet, but it may be worth it to prevent identity theft that could go undetected for years and have a major impact on your child’s financial situation when they are finally looking to use their credit. Teaching children about credit should begin at a relatively young age. When children may not understand the concept of credit, start by introducing the concept of having to pay back borrowed money. As they get older, introduce the idea of paying back more money than you borrowed to start working in the concept of interest. The more children understand the basic concepts at the foundation of credit, the more prepared and responsible children will be when they are ready to have their own credit cards.” Freddie Huynh, Vice President of Credit Risk Analytics at Freedom Financial Network “First, understand when a child would have a credit report. Some minors have credit reports because parents have added them as an authorized user on a credit card account. Others could be joint account holders or have a small bill (like a cell phone bill) in their names.Adults and minors older than age 14 can request free credit reports once per year from AnnualCreditReport.com or by calling (877) 322-8228. If no reports exist, the child’s credit has never been used — a good indicator that there are no problems. When reports do exist, parents or guardians and teens should review the reports together to make sure they contain accurate information. If there are any errors, follow the directions for correction on each credit reporting agency’s website.If a child starts receiving credit card or loan offers in the mail — or even collection calls — that is the biggest warning sign of possible identity theft. Others could include a child receiving a notice from the Internal Revenue Service about unpaid taxes, or denial of government benefits (as applicable) because the Social Security number has been used. Sometimes, identity theft with a child goes undetected until s/he applies for a driver's license or bank account. At that time, they learn that their Social Security Number has been used with another name.Never share your child’s Social Security number. If you are asked for a Social Security number for identification purposes, whether at school, a doctor's office or other, ask if you can use only the last four digits, or see if you can identify the child in some other way.Be very careful with foster children. They can be at greater risk of identity theft, as their information passes through many hands. In 2011, Congress passed legislation requiring child welfare agencies to help foster kids check and repair their credit when they turn 16. If you believe your child is a victim of identity theft, respond quickly. Contact each of the credit bureaus to report the fraud, and ask at least one of them to place a fraud alert on the account (one company will contact the others). You also should file a fraud report with the Federal Trade Commission.Consider a credit or security freeze if a child already is a victim of identity theft. A credit freeze, arranged with each of the three main credit reporting agencies, shuts access to an existing credit file, making it impossible for anyone to open a credit card or loan using a Social Security number. Find more at www.identitytheft.gov.In addition, parents can proactively do a credit freeze for a child. If the child has no credit file, the credit bureau would create a file in order to place a freeze on it. In general, this is recommended for this reason: If someone tried to apply for a loan using a child's stolen (but unfrozen) information, the lender would be informed that there is no credit history, and that the applicant is a minor. This could result in the fraud being reported. But with a freeze on the account, the lender would never be informed of attempts to use the number.What can parents do to help their young children with credit: Involve children of all ages in household budgeting. Long before kids even know what credit cards are, through high school, parents can involve them in household budgeting. Even young children can participate, since a good budget starts with setting family goals. Those goals might range from sending a child to college to taking a vacation to purchasing new outfits when school starts. List and prioritize the goals, then let those goals guide the budgeting process. When it becomes more about achieving goals than limiting expenses, kids start to learn that they need to make choices and that they probably can’t have everything they want. Without these basics, they will be unable to manage credit wisely when they are older. Help kids find ways to earn money, from early elementary school through high school. Talk with them about what that means, and how to use money they earn. Children in elementary school might earn allowance money through doing household chores. Older kids can babysit, take care of a neighbor's pets while they are on vacation, take care of someone’s yard, or shovel snow. When old enough to get a real job, parents can help and support them. Chances are that kids will receive at least some payment in cash and some in checks, which can help them understand these concepts. That’s a prerequisite to learning about credit cards and how they work. Don’t wait until kids get their own credit cards to learn how to make spending decisions. Help children allocate the money they earn — even if it's a small amount of allowance money — to spending, long- and short-term savings, and charitable contributions. Let them make some spending decisions while young, so they can learn from their mistakes while the effects are harmless. Explain interest. When children are around age 10, parents can start to explain interest. Parents can help children open a savings account, explain how compound interest works, and show them how their saved money grows. Or, if kids want to borrow money to buy a toy or other item, offer to lend it to them, with interest, and explain the effects. Later on, when they get a credit card, they will much more easily understand the problems in carrying a credit card balance. Walk the talk. At every age (beginning with infant and toddler years), remember that actions speak louder than words. As with every area of life, kids will pick up financial habits from their parents. If you spend like it's going out of style, you’ll be teaching this kind of money management to kids. Instead, figure out — and talk about — ways to live within your means. Maybe it starts with small, everyday habits, such as carrying a water bottle instead of buying a fast-food drink, or cooking at home regularly. Incorporate small measures into your daily life, and they will pay off with your kids — literally.” The bottom line Being a parent obviously comes with many responsibilities. Managing your child’s credit should be made a priority on your long list of things to do. If you follow this expert advice, do your own research, manage your own credit, and actively try to stay on top of your child’s credit security and education, you will have a better chance of creating a strong financial foundation for your child.

It can be challenging to successfully manage your personal credit, even if you are aware of what you should be doing. Just like personal credit, business credit is something that can be difficult to manage. You’ve probably heard the term “business credit,” but haven’t been given the information you need to understand how it works. As stated on Investopedia, “a business credit score is a number that indicates whether a company is a good candidate to receive a loan or become a business customer.” If you are planning on becoming a business owner/entrepreneur at some point, you should probably start reading up on business credit. To help you start, we asked a few business and finance industry experts to explain what they believe you should know about business credit. Gerri Detweiler, Education Director for Nav “Most business owners don’t even realize business credit reports exist. The three major commercial credit reporting agencies are Dun & Bradstreet, Equifax, and Experian, though there are others. These companies sell millions of business and personal credit reports each year, so just because you haven’t heard of business credit, that doesn’t mean it won’t impact your business. Here are a few things that often surprise business owners when they learn about business credit: Anyone can check your business credit without your permission or without telling you they have done so. Business owners are not entitled to a free copy of their business credit report because there are no federal laws covering business credit. Lenders are not required to tell you if they turned you down for financing because of information they saw in your business credit report. Business credit reports don’t list the names of companies reporting payment history. Instead, they list the type of account such as bank card or utilities. Personal and business credit are kept in completely separate databases at the credit bureaus. However, some types of business credit require personal guarantees and may report to the owner’s personal credit.” Sean Messier, Credit Industry Analyst for Credit Card Insider “Business credit, much like personal credit, is a fairly complex topic, and there are numerous similarities and differences between the two. In the earliest days of your business, your ability to get funding through loans and similar means will likely depend on your personal credit. You'll often have to provide a personal guarantee in order to get a business loan or credit card.It’s essential for your company’s growth that you establish a business credit file and begin building business credit as soon as possible.Though business credit is calculated differently and reported by different bureaus than personal scores, it can be built in many of the same ways. Once you’ve established a business credit file, open a business credit card, even if you have to provide a personal guarantee. Use your business card to fund essential purchases, and pay off your balance by the end of the month as you would with a personal credit card, and your scores should rise over time. Many business cards boast generous rewards programs, allowing you not only to build your credit, but to garner savings and helpful benefits.You can also bolster your business credit scores by establishing trade lines with vendors, suppliers, and lenders. It’s not universal, but some business-to-business merchants report tradelines to business credit bureaus — and if they don’t already, you can ask them to do so.” Brock Blake, CEO and Founder of Lendio “Similar to personal credit, business credit is built over time. Business credit reports are based on business demographics, public records, trade payment history, financial payment history, corporate family trees and identifying information for each business level, and small business owners and/or guarantors associated with the business. The problem is that it takes a long time for it to be an accurate depiction of a business’s creditworthiness. For personal credit, certain financial activity is required to be reported, but for business credit, that’s not the case. Lenders and credit bureaus aren’t required to report activity. A business could be open for years and not have much, if any, business credit history. Here are some basic things to know about business credit:It takes a long time to build business credit. Creditors and vendors are not required to report payment performance, but if they were, it would still take 10-20 years to have an accurate and thorough business credit report for a lender to review.Lenders more frequently pull personal credit. More often than not, creditors pull personal credit and not business credit. From the lender’s perspective, the business owner’s personal credit profile has many years of payment history while the business credit data is incomplete or inaccurate.Instead of pulling business credit, lenders focus on the cash flow of the business. Lenders are primarily interested in the financial health of your business and often ignore the business credit profile. As such, the main data points analyzed are the cash flow analysis and the transaction history of the business’s bank account. Business credit isn’t utilized by lenders in the same way that personal credit is, but there are many instances where business credit is helpful. Business credit can get your business approved for trade credit. If you’re building out inventory and want better payment terms, many trade vendors may also pull business credit to see if your business is worthy of a 60-day extended term. Trade credit and extended terms can both assist with cash flow management and provide relief in times of need.” Jenn Garbach, Head of Brand Marketing, Small Business Card at Capital One “Business credit is a critical component of a company’s ability to secure financing, yet our research shows less than half of business owners have ever viewed their business credit reports. By proactively managing their credit, businesses gain other important benefits such as better access to funding; becoming trusted partners, suppliers and vendors; and growing their businesses to capitalize on market opportunities. One way they can do this is to take advantage of free tools such as Business CreditWise which provides every business owner in the United States an in-depth view of their business credit report and the ability to make corrections to it without impacting their credit.” David Gafford, Co-founder of Shift Processing “Personal and business credit is a topic that's confusing for many business owners, and rightfully so. Many business owners will open up a business credit card during the launch phase of their business. Depending on the type of business they set up, that card can affect their credit score.Simply opening a new business credit card can be cause for a hard pull on personal credit, which might drop a personal score by a few points.Since credit score is heavily influenced by a person's credit utilization ratio, opening a new business card along with current personal cards can dramatically change how much available credit an individual is using. If the institution that you're applying for the new business card with requires a personal guarantee as a part of the application, the individual would then be liable for any unpaid debts the new business card might incur. When it comes to accepting credit cards as a form of payment at a business, a merchant's personal credit is taken into consideration before a merchant account is issued. Many times business owners with poor credit will apply for a new merchant account for their business and leave out their social security number, and try to get a merchant account that isn't tied to their personal credit. It isn't always possible to separate business and personal credit, but in the case of a merchant services account, there are special considerations that can be made on an individual basis.” Daniel Gillaspia, Founder of UponArriving.com  “Your personal credit score has a huge impact on obtaining credit for your business when it comes to small business credit cards. While not every business credit card will report to your personal credit profile, if your personal credit score is subpar, it could prevent you from being approved for many small business credit cards.” Nishank Khanna, CMO at Clarify Capital “Similar to how your personal credit score has a big impact on your financial life, your business credit helps you get better interest rates and terms when seeking a business loan or line of credit. Most alternative lenders will approve you for a business loan if your credit is over 600. But if you decide to pursue an SBA loan, the requirements are even more strict. SBA-approved lenders require a credit rating of at least 640.If you're looking to get a traditional term loan, lenders will factor in your personal credit score to make their approval decision and also to decide what APR and terms to offer you. That being said, there are other forms of financing available where your personal credit is not a deciding factor. Invoice factoring is one such option.” Lisa Chu, President and CEO of Black n Bianco “Every business should be aware that their personal credit score will affect their ability to obtain a business loan. While a business credit score may be important, most lenders do look at personal credit scores when deciding whether to grant a business loan. Personal credit scores are very often linked with your business credit score as missing payments, late payments, or overdues will usually show up on your business credit report. It's critical to protect both your business and personal credit score. Doing a yearly routine check of your business credit report is also critical, because it will give you the option to dispute any errors before it affects your score. Understanding what is on your business credit report is only a partial part to running your business.” The bottom line Clearly, business credit can be an important part of your business-owning journey. Therefore, it’s important that you manage your business credit the right way. According to a U.S. Small Business Administration (SBA) article, when you build credit for your new business, you can "improve your company’s image, protect your personal credit, limit your liability," and more. 

For most people in their early to mid-twenties, life can be challenging. After all, by the time you turn 25, you’re expected to have life figured out — where you live, what job you have, what car you drive, etc. Probably one of the most important factors of life that you are expected to figure out by the time you are 25 is credit. According to a recent poll conducted by Branded Research, 68 percent of those between the ages of 18-24 said they currently have a credit card they use regularly. That number increases to 78 percent for those in the 25-34 age range. The poll results also showed that approximately 41 percent of those who are 18-24 who do have a credit card, used their credit card primarily to build up credit. Meanwhile, 35 percent of those in the 25-34 age range used their credit cards to primarily earn rewards and only 29 percent of them used their credit cards to build up credit. If you are approaching your mid-twenties and still have a ways to go to establish a strong credit foundation, you should know you’re not alone. Here’s what the experts say you should know about credit by the time you turn 25: Why credit is important “Your credit can affect your everyday life far more than you might think. Credit scores are instrumental in helping lenders determine your interest rates, and your likelihood of being approved for credit cards also depends on your credit history. What’s less commonly discussed is how negative credit can even affect your ability to rent desirable properties or get certain jobs.” — Sean Messier, Credit Industry Analyst at Credit Card Insider “By the age of 25, everyone should be aware that their credit score is crucial to set themselves up for financial success because most people typically need to start out borrowing money to get themselves through the early years when cash outflows are high compared to cash inflows. People need to understand that the basis of borrowing money from banks begins with an assessment of their credit score. Banks typically are highly reluctant to lend money to someone with a low credit score. Additionally, just because someone has a high credit score doesn’t necessarily mean that banks will lend to them. Banks want to see a track record of credit history and that the track record is scored within an acceptable range using the FICO scoring system.” — Michael J Bús, CEO and President of PNW Financial“Your credit score is the most important factor in your entire financial life. It determines the mortgage rate you’ll pay, the car loan you’ll receive, and whether you’ll get approved for an apartment or credit card. It can literally be the difference between spending an extra six figures over the life of your mortgage or saving six figures.” — Mike Pearson, Founder of Credit Takeoff “A healthy credit report and score can help you out considerably in the future and save you a lot of money over a lifetime. Credit is used to determine many things that lie ahead, such as auto loans, mortgage, qualifying to rent an apartment, in some cases employment, etc. Maintaining a healthy credit will grant you lower interest rates, lower deductibles, higher credit limits, etc.” — Jacob Dayan, CEO and Co-founder of Community Tax and Finance Pal What makes up a credit score “Although they each use their own mathematical formula, credit rating companies...base their scores on the same criteria: Payment history, length of credit history, debt to credit limit ratio, number of credit inquiries, and type of credit accounts. Any late payments, collections activity, high account balances, and credit inquiries can lower your score."  — Richard Best, writer for Dontpayfull.com“You can’t win the game unless you know the rules. To get and maintain a good credit score, you have to know how your credit score is calculated in the first place — most people have no idea. Study up on things like payment history, credit utilization, and credit inquiries. Know what goes into your score so you can take action to stack the odds in your favor.” — Pearson“You should know how your credit score is calculated. Too many people think that their credit score is just some magical number that is vaguely related to how many missed payments you have. While paying your bills on time is certainly a part of your credit score, the whole story is a bit more complicated than that.There are actually five factors that go into calculating your credit score: Payment history: Your payment history — that is, how responsible you've been with paying your bills, especially on credit cards and installment loans — makes up an enormous 35 percent of your credit score. Utilization rate: Your utilization rate, or the ratio of your credit balance to your total credit limit, makes up 30 percent of your credit score. Ideally, you don't really want to be carrying a balance on any of your credit cards. If this isn't possible, aim to keep your total utilization of any one card's credit limit to 30 percent. So if you have a credit card with a $10,000 credit limit, do your best to keep your credit utilization under $3,000. Length of credit history: Your length of credit history comprises 15 percent of your credit score. There's not much you can do about this credit scoring factor other than to continue to handle credit responsibly, year in and year out, and also make sure that you don't close your oldest credit card. New credit: New credit is a factor based on how many loan applications, credit pulls, and new credit accounts that appeared on your credit report in the past six to twelve months. This factor accounts for 10 percent of your credit score. The more loan applications, credit pulls, and new credit accounts that appeared on your credit report recently, the more this "new credit" factor will work against you. Credit mix: Credit mix is a factor based on the variety of credit accounts appearing on your credit report. Revolving credit accounts such as credit cards would be one kind of credit account. Installment loans such as a car loan would be another. Like the new credit factor, this factor accounts for 10 percent of your credit score. Like it or not, the theory here is that if someone has experience handling different kinds of credit responsibly, the more responsible of a borrower they are overall.” — Logan Allec, CPA and Owner of Money Done Right What affects your credit score “Hurting your credit score is easy. Rebuilding your credit score is hard. A single late payment on your credit report will be visible for seven years. It's critical to pay your bills on-time because 35 percent of your credit score is based on your payment history.” — James Garvey, CEO of Self Lender “[...] a lot of young individuals don't realize just how many things affect credit score. For example, items such as parking tickets, medical bills, cable bills, library fees, and even gym memberships can affect your credit score believe it or not. A lot of millennials just brush these bills to the side not knowing they might come back to bite them later on when they apply for a loan.” — Matthew Ross, Co-owner and COO of RIZKNOWS and The Slumber Yard How to check your credit reports and credit score “The Fair Credit Reporting Act requires that all borrowers receive a free credit report from each of the three credit bureaus. It is important to get into the habit of requesting a report from each throughout the year. Order one every three months so you can monitor your credit all year long. Go to www.Annualcreditreport.com and register for your free copies.” — Best “There are no reasons to pay for a credit report. You can check your credit reports and scores for free with Credit Karma or Credit Sesame.” — Elise Nguyen, Personal Finance and Lifestyle Blogger for Little Seeds of Wealth How to use a credit card and how to build credit “Credit cards allow you to build credit history, which is important for your financial health. Having a credit history allows you to take out a loan, finance a car or even buy a house. Establishing a trail shows lenders that you’re able to make payments on a frequent basis. Paying your credit card bills on time will allow you to obtain a strong credit score, apply for items that require credit and receive lower interest rates. Building credit takes time and patience, but it’s worth the wait.Overspending can lead to a high balance or not enough available credit. Your utilization rate, or the amount of available credit you have, can also negatively affect your score. In addition to your overall balance, pay attention to the amount you have. Make it a rule to keep your utilization rate below 30 percent on your credit card at all times. Maxing out your credit cards or leaving a part of your balance unpaid won’t work in your favor.” — Erin Ellis, Accredited Financial Counselor at Philadelphia Federal Credit Union (PFCU)“You should know what the credit utilization ratio is and understand that you should only be using 30 percent of the credit you have access to. Many young adults are maxing out their credit cards and don’t understand the damage they are doing.” — Jacqueline Devereux, Credit Expert for SproutCents“Making only the minimum monthly payment can hurt you in the long run. Making the minimum payment on your credit card accounts will help you avoid late fees, but it has its fair share of consequences. You’ll still accumulate interest, which can cause debt to spiral out of control faster than you might expect. Plus, a high utilization ratio — your balance versus your overall credit limit — can damage your credit scores.” — Messier“Here are my three rules for young adults who want to start building their credit. Do these before applying for credit.1. Have a budget in place and use it for at least six months2. Have a bank account with a debit card and go 12 months without having a purchase denied for insufficient funds3. Build an emergency savings fund equal to one month of your incomeDon’t try to start building credit with the big, national bank credit cards. Start smaller and closer to home. A tire shop, retail store or gas station card is easier to qualify for.” — Todd Christensen, Education Manager at Money Fit and author of Everyday Money for Everyday People“Credit cards have very high-interest rates because the loans are not secured by any tangible asset. Pay off your credit card debts on time to avoid accumulating interests. Start working on improving your credit score as early as possible. Bankers and lenders use credit scores to know if you are a good borrower and pay on time. You don't want to miss out on a home you want because of poor credit scores.” — Nguyen “High-interest rates will make it much more expensive to pay back the money you borrow. So remember, making minimum payments on credit cards is fine, but a big chunk of those payments will be going toward interest, not toward paying back your debt.” — Gerri Detweiler, Education Director for Nav Key Takeaways: Make sure to know these things about credit by your 25th birthday. • Why credit is important • What makes up a credit score • What affects your credit score • How to check your credit reports and credit score • How to use a credit card and how to build credit The bottom line Credit is clearly important. Your age shouldn’t be the only thing that motivates you to start building your credit, even though you may experience a financial reality check the closer you get to your mid to late 20’s. Facing your credit head-on at a younger age can help you in the long run. Work on building good credit and fixing your bad credit before you hit your 25th birthday, so you’ll have one less thing to worry about.

Love is clearly a powerful emotion. It can make even the most normal people do crazy things. Unfortunately, love can also be powerful enough to hide a person's dark side. That's why hundreds of people fail to see the reality of their bad relationships right away. A financially abusive relationship is just one of the countless bad situations that many people eventually find themselves in. What exactly is financial abuse? According to the National Network to End Domestic Violence (NNEDV), "financial abuse is a common tactic used by abusers to gain power and control in a relationship. The forms of financial abuse may be subtle or overt but in general, include tactics to conceal information, limit the victim’s access to assets, or reduce accessibility to the family finances." We asked experts to share their insight into why financial abuse occurs, warning signs, and advice for recovery: Why financial abuse occurs Stephanie Nilva, Executive Director of Day One: "Financial abuse is one of many ways abusive partners attempt to control others. Creating financial dependence can isolate the victim and cause them to rely on the abusive partner more heavily. Without friends or family for support, the survivor has much more difficulty ending the abusive relationship. Sometimes there might be cultural or gender 'norms' about who is the wage-earner taken to an unhealthy level." Ellie Thompson, CEO of Money Therapy: "Abuse really comes down to the abuser not feeling powerful within themselves. So, instead, they abuse other people to feel powerful. Financial abuse is the same as any other type of abuse but it is being used with money." J. Hope Suis, Relationship Coach at Hope Boulevard: "Financial abuse is about power and control. One person needs to control every aspect of the relationship and money certainly is a huge factor in that. Also, they need the other person dependent on them to feel powerful. If they cannot purchase anything without checking in, or if they have no access to money, they must completely rely on the one with the power. This sets up a very unhealthy and one-sided relationship dynamic." Kalen Omo, Personal Finance Coach and owner of Kalen Omo Financial Coaching: "My opinion is that financial abuse occurs because of pride or shame. When a single person is entrusted to take on the burden of managing the financial household, and things don't work out as expected, the first reaction is to try to fix it yourself. This leads to the beginnings of financial abuse." David Bakke, Personal Finance Expert at Money Crashers: "Generally speaking, financial abuse occurs with people who at times experience levels of low self-esteem, or who more importantly have never managed their own finances and therefore won't recognize the signs. And then there's always the argument that emotion can overtake money as far as folks who feel too strongly about an individual to put a stop to the abuse." Warning signs of financial abuse Nilva: "Having a partner control the finances in a relationship, such as taking someone’s paycheck, forcing the other person to pay for things, forcing them to work or preventing them from working. One person in the relationship might keep all of the couple’s finances in their name. For young people, this might show up as manipulating a person around money, such as taking their MetroCard or money, destroying their property (such as a cell phone), or making them pay for everything." Thompson: "Warning signs of financial abuse can show in the behavior from the person being abused. You may start to notice they are justifying every purchase they make even something as simple as basic needs. You may also notice they don't want (to) 'indulge' in normal activities such as going out to lunch, buying a new shirt, or purchasing a coffee. This behavior is different from someone who is simply cutting back on expenses. The person being abused might express a fear of getting in trouble instead of saving money." Suis: "You should always have access to and control of your money. Obviously, in a marriage, there are combined accounts/bills and ideally one person handles the finances to avoid confusion, however, both parties should be able to view all transactions. Being kept in the dark, especially when you contribute, is a huge red flag. Discussions should be made on large purchases, but no one person should have to ask permission or turn in receipts for everyday items or purchases. It is also possible that someone will use your information and take out loans and make purchases without your knowledge. This is against the law and not just abuse of your trust." Omo: "Some of the signs of financial abuse are couples with separate checking accounts and a lack of communication when it comes to money. These two are strong signs that there is a lack of trust between husband and wife to work together to tell their money where to go." Bakke: "One sign of financial abuse is when your partner or significant other restricts your access to your own money or even credit. Another sign is when that individual uses your funds or money for their own purposes without asking permission. A third sign is when money is borrowed from you without asking. But there are others." Financial abuse recovery Nilva: "Counseling and support from peers can contribute to healing. Sometimes ending the relationship might be sufficient. A credit counselor or someone experienced with assisting survivors can help disentangle a couple’s finances or direct a survivor to victim compensation funds." Thompson: "Recovering from financial abuse will take time but it can be overcome. The fact of the matter is that no one should have authority over your finances except you. Finding support groups in your community or online can be the first step to heal from your experience." Omo: "Seeing a good financial coach that can address the money-related issues and, in some cases, marriage counseling to identify the root of the cause are good steps to take to recovery." Bakke: "Get help. It doesn't matter from whom but get a third-party, uninvested individual so to speak, who can give you some straight talk. Get out of a relationship that involves financial abuse as well. From there, start with the basics of managing your own money, and try to learn how to avoid individuals who might attempt to exploit you." Advice for those experiencing financial abuse Nilva: "Financial abuse is one element of what could be a harmful relationship where violence or other forms of control are present. Getting therapeutic counseling can be useful in identifying boundaries and how to end any abusive relationship. Speaking to an attorney experienced with intimate partner violence can alert someone what, if any, other help might be available, such as getting an order of protection or potential criminal penalties for theft." Thompson: "Financial abuse should not be tolerated in any form. An abuser will not stop their behavior and there is no begging or pleading that will get them to change. You need to change your situation whether that is a personal or business relationship. Use your skills to find a new job or new income opportunity. Visit sites like upwork.com or visit your local community center to find opportunities." Suis: "If you are just in a relationship (not a marriage), then you need to find a way to get out. Unfortunately, having someone step up to handle everything seems like a blessing, but if you are out of the loop entirely and have no control over your money, that is not a healthy relationship. If you are in a marriage and the victim of financial abuse, the first step is to try to talk with your spouse. Calmly express your concerns and ask to have more of an active role in the bills and financial decisions. If this does not work, I suggest seeking outside counsel in order to protect your assets and decide your path going forward. If someone has unlawfully obtained money or loans in your name, then you should report this activity to law enforcement." Omo: "My recommendation would be to meet with a financial coach to begin identifying the pain points related to a lack of trust regarding money. In some severe cases of financial abuse, such as financial infidelity, marriage counseling may be in order to address the root of the issue." Bakke: "If you think you're experiencing financial abuse, reach out. It could be to anyone but the best bet is to do so through a family member or friend, or better yet, a financial counselor. You could even reach out to someone at your church you trust, who can point you in the right direction as far as other resources. Financial abuse is a serious problem, and the best thing you can do is to recognize it, then step up and get the help you need to make sure it never happens to you again. Empowerment is the key." The bottom line Financial abuse may be more common than you think, and it can cause lasting emotional and financial damage. It can impact everything from your credit score to the amount of money you have in your savings. Communicating with your significant other and/or seeking professional outside are two ways you can start addressing a financially abusive relationship. Keep in mind that it's possible to miss seeing the signs of financial abuse, especially if you are blinded by the idea of a loving, new relationship. Although a person may seem like "the one" in the beginning, they may turn out to be the one controlling and restricting your financial agency if you're not careful.

Building good credit can be difficult, and building good credit from scratch may seem like an even greater challenge. Most people start learning how to build credit when they are in high school or college, but some will avoid anything credit related out of fear or ignorance. Those who wait to build credit eventually realize that they should have started earlier in order to enjoy the benefits, like better mortgage or car loan rates. Although building credit may be difficult, it's definitely not impossible. We asked a few financial experts for tips on how to best build credit from scratch. Look into getting a secured credit card "Apply for a secured credit card. A secured card is backed by a cash deposit. If you place a $500 deposit for your card, you can charge up to that amount. A secured credit card can be a great way to build a positive payment history and works the same as a normal credit card. You can use your secured card to make regular purchases, and you’ll receive a statement to be paid by the due date. One key difference with a secured card is that if you fail to make payments, the card issuer may take your deposit." — Megan Robinson, Financial Coach and Personal Finance Reporter for DollarSprout.com "Get a secured credit card. There are plenty of secured credit cards that don't require a credit check and help you build credit using a card with funds you've already put on the card." — Sarah Moe, Money Coach at Flauk Pay your bills on time "One way to build your credit from scratch is to pay your monthly bills on time. Some folks don't know this, but that helps you build a credit score." — David Bakke, Credit Expert at Money Crashers "The first step to building a good credit score is signing up for a credit card and making on-time payments every month. However, qualifying can get difficult when you may already have a low score. I would then recommend looking into alternative methods for building up your score, like reporting your on-time rent payments to a credit bureau through a credit tracking service or making sure to consistently pay off a car or student loans that can also have an impact on your credit score." — Jason Hill, Financial Advisor and Founder of Client Focused Advisors "Paying any doctors' or utility bills in a timely manner is very important, as unpaid bills could be sent to collections which could seriously damage your credit score. To build your score fast, save enough money to pay off your credit card bill in one payment and keep a $0 balance, or at the very least, do not allow your balance to exceed 30 percent of your credit limit. If you don’t have a credit card, be sure to set a calendar reminder to mail in a check or pay over the phone with your debit card before your balance is due." — Jill Caponera, Consumer Savings Expert at Promocodes.com Be smart when you use credit cards “Look no farther than two to three credit cards. The trick is to only use them for occasional purchases already in your budget and keep the balance under 30 percent utilization. There is no need to take on large debt such as auto loans, to build credit. Credit cards will do it faster and with much less debt load!” — Carla Blair-Gamblian, Credit Expert at Veterans United Home Loans "Don't apply for too many cards right away because it will have a negative effect on your score. After you get the first one, wait eight months before applying for anything else." — Joyce Blue, Money Relationship Expert at Empowering You Life Enhancement Coaching LLC Consider getting a co-signer "If you have a responsible family member whom you trust, ask them to cosign on a small loan or unsecured credit card. With a co-signer, you are still legally required to make payments to your loan or credit card. If you fail to do so, however, the financial burden falls on your co-signer. This option is best if you have a consistent income and are confident you can make your payments on time. If not, it can negatively impact the credit score of both you and your co-signer." — Megan Robinson, Financial Coach and Personal Finance Reporter for DollarSprout.com "Getting an auto loan or personal loan and making on-time payments could really help to jump start your credit, but getting such with no credit history in the first place could be tricky. Asking someone with good credit to co-sign your auto lease, for example, could be your answer for not only getting the lease approved but also getting a better deal on the monthly payments and interest rate. Keep in mind, if you are unable to make the lease payment, your co-signer will be on the hook for the expense, so be sure to have a stable job and an emergency fund saved that can be tapped to cover these payments should you lose your job." — Jill Caponera, Consumer Savings Expert at Promocodes.com Stay on top of credit reports "Always check your credit reports for errors and discrepancies and correct the issues immediately. This can make a huge impact on your credit in a short period of time." — Jeffrey Bumbales, Director of Marketing at Credibly Become an authorized user "Is there a member of your family whose credit is already well-established? Consider asking them to add you as an authorized user on one of their credit cards. As long as they continue to make purchases and repay their balance to maintain good credit, you’ll also reap the benefit of watching your credit score climb." — Ennie Lim, Co-founder and President of HoneyBee "As an authorized user, you get a credit card with your name on it through someone else’s account. You can use your card to make purchases, but you are not responsible for paying the balance. Legally, the primary account holder is the only one liable for charges to the account. This is a good option for teens and college students who don’t make a consistent income to keep up with payments, but still want to be proactive about building their credit." — Megan Robinson, Financial Coach and Personal Finance Reporter for DollarSprout.com Key Takeaways: There are several steps you can take to build credit from scratch • Look into getting a secured credit card • Pay your bills on time • Be smart when you use credit cards • Consider getting a co-signer • Stay on top of credit reports • Become an authorized user The Bottom Line Clearly, credit is important in today's world. Your credit scores can either open doors for you or close them. If you have bad credit, you might want to consider looking into credit repair services. If you have no credit history, try doing your own research regarding good credit habits and follow the tips mentioned above to start your credit-building process.

Lexington Law has provided credit repair services for quite some time. You've probably seen their brand represented on social media and various websites when you browse online. So, how do you know if they can help you repair your credit? Simple. You read reviews. The general public is typically cautious when it comes to places that provide credit repair services. And they should be. Several credit repair services are on record as either operating under illegal terms and/or not providing legitimate services as well as results. Even though credit repair services like Lexington Law continue to prove service legitimacy on websites and through brand representation, some people are still skeptical of credit repair services. Reading reviews can either make or break your decision about credit repair. If you read reviews of a credit repair service on an unreliable review site, you probably won't be reading the truth from real customers. It's important to make sure the review site you are using is providing real, honest customer reviews. If you are curious about what real customers have to say about Lexington Law credit repair services, here are a few reviews that verified customers have left on BestCompany.com. These customers were not bribed, manipulated, or provided compensation for their reviews. Nikita — 5 out of 5 stars: "I have been a member of Lexington Law since May 2013. And I must say, they have displayed being #1 in class, in my opinion. I appreciate the time and effort they provide getting your credit repaired and back on track. Very professional and highly trained and skilled people who are great in credit restoring and rebuilding." Tiwana — 5 out of 5 stars: "I am impressed by what this company has done so far, My credit was at 400 with 66 collections. 46 items have been removed and my score is 571. I still have a ways to go but a huge improvement. I have noticed a plateau the last 2 months, but I'm hoping things pick up again soon. Great company." Chris — 3 out of 5 stars: "Just to state I am a real paying customer of Lexington Law. I have been a customer now for one month. My credit took a dive after a divorce and a bad car accident all within months from each other in 2016. After everything was said and done, I had a 510. Trying really hard on my own, it took forever to see anything. Within the first month of being a customer, they have gotten 3 items removed from collections. Hoping to see what happens in the next couple months. Hard work from me, and help from them I now have a 651!" Shean — 5 out of 5 stars: "I used Lexington Law in the past and was able to purchase a new car. Well, life happens and I reached out to them again in the hopes of purchasing a home. They haven't disappointed. The experience and knowledge this company has at getting your credit on track is amazing. I have referred several of my friends and family to use Lexington Law Firm." Linda — 5 out of 5 stars: "Lexington Law is outstanding. Definitely are improving our credit score and removing things we didn't even know was on it! I would recommend them to anyone trying to raise their credit score! The best part is being able to see what is on your credit report anytime you want and working with someone to dispute it. It has helped us in so many ways. It is a little expensive, but it works to your advantage in the end." Teri — 5 out of 5 stars: "I've been very happy with them. I told them I could not afford what they wanted for a monthly fee and she kept lowering it until I could, it would just take longer, and that was explained in detail to me. I was ok with that. Nobody can make you sign up for anything you don't want to... Just remember that! My credit score increased and my husband saw what they did for me and now he wants me to get him signed up." Carolyn — 1 out of 5 stars: "I used this company and paid $119.00 a month, they did remove some items, but they all came back on my credit when I was no longer with them. Also, they removed from one credit report at a time even if the same info is on all three. But I guess it does not matter if the information is not staying off after being removed. Now to add insult, my score did not increase. I should have been refunded, but I was able to cancel." Kiyanna — 5 out of 5 stars: "I had Lexington Law for about 3 years. A lot of negative items have been removed, even 120+ late payments (they saved my life with that one). I do think they spread out the time in which they send correspondence to challenge negative items, but it is a business and they still need to make money. $99.99/ month is a fair price for me. I have been patient and very happy with my outcome. I had no issues with billing; it is a pretty straightforward process." Robert — 5 out of 5 stars: "So far so good. Just called them today but they seemed very knowledgeable and spent a lot of time with me on the phone answering all of my questions. Seems affordable and the staff is very kind and understanding." Lexington Law offers top-ranked credit repair services. Click below to learn more about Lexington Law and to read additional Lexington Law customer reviews. Learn More

Guest Post from Lexington Law The prospect of having a delinquent credit account turned over to a collection agency can strike fear in the heart of any consumer. While this is certainly not an ideal situation, the collections process is much less “savage” than it used to be.   Thanks to legislation to maintain fair collection practices, consumers are no longer subject to threatening or abusive calls at all hours of the day. The Federal Trade Commission protects consumer rights by enforcing the Fair Debt Collection Practices Act. This act was put in place many years ago to prevent collection agencies from employing unfair, deceptive, or abusive tactics. Some collectors still attempt to violate the law, though advancing technology like caller ID and call blocking has made even those attempts increasingly unsuccessful.   Of course, the best way to avoid those unpleasant collection letters and phone calls is to avoid becoming delinquent on your credit accounts in the first place. Paying your monthly debts on time is the best way to ensure you don’t lower your credit score. But if you find yourself in danger of having debts turned over to collections, it is important to be educated about how to deal with it and to understand what a collection agency can and cannot do.   What collection agencies can do Contact you A collection agency’s job is to attempt to collect a debt. Therefore, they can contact you and request that the debt be satisfied. That is perfectly legal and they are within their right to do so. Debt collectors may attempt to contact you by phone (within the approved times), letters, email messages, and/or texts sent to your phone as long as they abide by collection guidelines. For example, they cannot call you before 8 a.m. or after 9 p.m. without your explicit permission. Debt collectors must also identify themselves as such whenever they contact you. Attempt to garnish bank accounts or wages Collectors are allowed to take you to court to collect money you owe on a debt. In the event that the case is not ruled in your favor, the court enters a judgment for the amount of your debt, which allows the collector or creditor to obtain a garnishment order with your bank or employer to collect the money owed directly from them. If you ignore a court summons received in the mail, you are surrendering your ability to defend yourself against creditors attempting to garnish your wages.   What collection agencies cannot do Misrepresent themselves Debt collectors are prohibited from misrepresenting who they are. They are not allowed to pretend to be someone else — such as the IRS or other government agent, or a lawyer, for example. Lie to you or threaten you Collection agencies are not permitted to lie to you, threaten you, or attempt to intimidate you with constant phone calls or other harassing tactics in their attempts to collect a debt. Attempt to collect from certain types of accounts Although creditors can attempt to garnish bank accounts and wages, there are certain types of income that they cannot touch unless back taxes are owed or a person is delinquent on child support or alimony. Federal benefits typically off limits to collectors include the following: Veterans’ Benefits Social Security Payments Supplemental Security Income Payments Federal Emergency Management Agency (FEMA)/Federal Disaster Assistance Benefits for Military Survivors Military Annuities Federal Retirement or Disability Payments What power do you have as the consumer when a collector breaks the rules? As a consumer, you have recourse in the event that a collection agency does something illegal as outlined above. You are permitted to sue a collector in state or federal court, but you must file your suit within one year of the violation. In some cases, collectors can be ordered to pay consumer damages for lost wages, and even bills for medical care that resulted from stress inflicted on you by their collection practices. If you believe you have a case, you should contact either the Attorney General’s office for your state, the Federal Trade Commission, or the Consumer Financial Protection Bureau.   Of course, the most important action you can take to avoid the stress of dealing with a collection agency is to seek credit repair assistance to remedy the situation before delinquent payments and balances become an issue. Choosing a credit repair company with legal expertise will afford you the best option to fix credit and assist you in filing credit disputes on any debts you believe to be unfair or inaccurate.  

Credit plays an important role in our lives. It can determine if you qualify to purchase a house or car, if you can land jobs, and even determine your eligibility to fulfill your life-long dream of starting your own business. That's where credit repair can come in handy. Even a small rise in your credit score can help you more than you may think. Here are 10 GIFs that you can probably relate to if you have gone through the credit repair process:1. The depressing feeling you get when you check your credit score: 2. When you consider DIY credit repair and you get a headache: 3. The moment you finally admit that you need professional credit help: 4. When you start desperately looking for a reliable credit repair company to get you out of the dark credit abyss: 5. When you finally find the right company for you: 6. The embarrassment you feel when the company diagnoses your current credit standing: 7. The feeling of waiting for results: 8. When your credit repair consultant keeps you updated on your credit progress: 9. When you realize your credit repair company was successful and improved your credit score: 10. That moment you step out into the world knowing your credit problems are history and you're no longer financially hopeless:

Have you ever heard the expression "live below your means," and wondered what it meant? According to the Huffington Post, living below your means is when "you live a lifestyle below your net income." Basically, if you focus on living a more frugal lifestyle than the one you could currently afford, you will be setting yourself up for a brighter financial future. Personal Finance Expert and Owner of DollarSprout.com, Jeff Proctor, explained that it's important to "start planning for the future. A lot of people, especially millennials, justify overspending because they’re living in the now and not thinking much about 1, 5, or 20 years down the road. Decide what you want to accomplish in life and what kind of future you’d like to build. Envisioning yourself in your ideal future will motivate you to work harder to achieve it." Although living below your means is an obvious recipe for financial success, many people struggle with this idea because they don't know where to start or have a difficult time letting go of their current financial habits. Proctor advised that you start by asking questions. He said "a simple way to start living below your means is to question every purchase. I recommend asking yourself three questions before buying anything: 1. Do I need it? 2. Will I use it? 3. Can I get it for less? Asking yourself these questions forces you to reflect on the purchase before making it. You’ll start to become more aware of your buying habits and more selective in your purchases." Ellie Thompson, CEO of Money Therapy, explained that "to live below your means you need to focus on the big-ticket items in your life. Instead of focusing on your everyday spending, evaluate things like your car payment, mortgage, and insurance. Usually, if you are living above your means your fixed expenses are usually too high. Try using the 50/20/30 rule. This means 50% of your income goes to your fixed expenses, 20% goes to your savings goals, and 30% goes to guilt-free spending." Thompson suggested that "the best way to start living below your means is to reduce your fixed expenses. If you are simply unable to do that, you need to evaluate your earning potential. Budgeting is like a diet, you know the only way to have more money is to spend less or earn more but you may look for ways to get around this. The truth of living below your means includes the other side of the equation which is you may need to earn more. Don't sell yourself short." Even though some may see the idea of "living below your means" as a restriction of financial freedom, Proctor and Thompson say otherwise. Proctor explained that "if you value freedom, then yes, living below your means is worth it. If you’re constantly spending as much as (or even more) than you make, you’re not able to save for the future and will eventually find yourself stuck in a less than ideal situation without the means to escape (e.g. a job you dislike). Living below your means is a key part of achieving financial independence." Thompson said "living below your means is essential to save money. If you are always living above them you will be trapped in debt and unable to save for your family or yourself. Instead of viewing living below your means as a punishment, view it as a favor to your future self." Living below your means doesn't have to be all about restricting yourself or avoiding any non-essential spending. It's simply a way to ensure that you are securing your financial future and proves that you are able to control your spending and saving habits. The sooner you start planning for the future and developing solid financial habits, the better. Begin with a self-diagnosis of your current credit standing, financial habits, and budget. From there, try adjusting your lifestyle so you can live below your means to reach your future financial goals.  

Most friends, family, and coworkers love to give advice. If you've asked them for credit advice, however, you've probably heard some pretty terrible suggestions. There's nothing wrong with seeking advice about your finances, but make sure you do your research before you start implementing others' ideas into your own financial game plan. After all, following bad credit advice could dig you into a deep hole of debt and regret. Fortunately, you can fix your bad credit if you do happen to follow someone's bad advice.   To help you determine the difference between good and bad credit advice, here are a few real accounts of the best and worst credit advice people have received:   Adam Jusko — Founder and CEO of Proudmoney.com Best Credit Advice: "When I bought my first car, I was determined to pay it completely in cash. I mentioned my plan to an older co-worker, and he suggested that I instead make a big down payment but take out a small loan to pay the rest. That way, I’d have a track record of making payments responsibly. He’d paid for a car outright in his 20's and regretted it because when he went after a mortgage, later on, his lack of a strong credit history made the process more difficult. He also knew I was using almost every penny of my savings to buy the car, leaving me with little cash in case of an emergency. I followed his advice because rates were low and his experience made sense to me. I still paid for over 50 percent of the car upfront, though. Even with the low rates, I hated the idea of paying interest."   Worst Credit Advice: "The worst credit advice I’ve ever received (and I still hear people give this advice) is that you need to carry a small balance on your credit cards to improve your credit score. The theory seems to be that carrying a balance shows you are using your credit without overusing it, thus showing some level of self-control and responsibility. In reality, carrying a balance is worse for your credit score because higher credit utilization is worse than lower credit utilization and you pay interest for no good reason."   Makenzi Wood — Personal Finance and Frugality Blogger at Picky Pinchers Worst Credit Advice: "The worst credit advice I ever received came from my dad. To establish my credit, he helped me get several store credit cards in my name. He then instructed me to blow through the cards and spend up to my credit limit. I was 18, so he didn't have to beg me to splurge on myself with some retail therapy. Anyway, once I racked up all the charges, he said I could only pay the minimum payments moving forward. It took MONTHS to pay off all the debt with the minimums. He said it's important to 'let the companies make a little money on you' to boost your credit score."   Janice Lintz — Freelance Writer at janicelintz.com Best Credit Advice: "The best advice I received was to pull all three credit reports for free to confirm the accuracy of the information before applying for a credit card. My statements incorrectly stated that I worked at a pizza shop and had a lien filed against me which I didn't. My FICO score dramatically increased after the data was corrected. The credit card companies could have denied me a credit card based on wrong information.”   Dan Wesley — Founder of CreditLoan.com Best Credit Advice: "The best piece of credit advice I’ve heard is to not max out your card and make each payment in full and on time. Unfortunately, there is no quick fix to improving your credit. However, showing that you are a responsible borrower by keeping your utilization at a minimum and not carrying a balance is one of the easiest ways to improve your credit score."   Worst Credit Advice: "One of the worst pieces of advice that I’ve heard is that you have to max out your credit card to show that you are able to pay it back. This is not sound advice. Your credit utilization rate makes up roughly 30 percent of your credit score, so you want to keep your overall use below 30 percent. If you have a $300 credit limit, try not to use more than $90/month."   Jesse Harrison — Founder and CEO of the Employee Justice Legal Team Best Credit Advice: "The best credit advice that I got came from my best friend, and the advice was, "you need credit to live in this country." I am an immigrant and in my country, there is no credit, everything is cash. To buy a house, you need to have the entire price in cash. Since I did not grow up in the United States, I did not understand the value of having a credit history. I was still a believer in all cash. I did not want to buy anything unless I could pay for it in cash. I thought buying something on credit is irresponsible behavior, because after all if you don't have cash, why are you buying? My friend changed my mind by explaining to me that everything here works on credit and I could improve my financial situation by improving my credit. I finally got a credit card in my late 30's (before I only used my debit card) and slowly built my credit. I ended up purchasing my favorite luxury car and several properties based on my credit. Had it not been for my friend's advice, I would be struggling to buy my first property because I wouldn't have enough cash on hand to completely pay it off.”   Sacha Ferrandi — Founder and CEO of Source Capital Funding, Inc. and Texas Hard Money Best Credit Advice: “The best credit advice I have received and given is to pay more than the monthly minimum whenever possible. With the average credit card interest rate being about 15.59 percent in 2017, paying the monthly minimum can quickly put you into a hole. According to NerdWallet.com, the average household with debt owes just over $15,500 on credit cards. That being said, if you were to pay a minimum 3 percent of the balance each month at an interest rate of 16 percent, it would take you nearly 21 years to eliminate the debt. In that time you would have paid almost $12,000 in interest. However, if you were to pay even just 2 percent more (5 percent) of the balance each month, you would pay just over $5,000 in interest and eliminate the debt in 19 years. Although this is still a significant amount of time spent paying off the debt, it can help cut the amount of interest paid over that time in half.”   Holly Wolf — Director of Customer Engagement at Solo Laboratories, Inc. Worst Credit Advice: "Don't pay off your mortgage because it's tax deductible. Why pay a penny more interest than you need to and the government doesn't give it all back to you (from friends and coworkers). I ignored this advice and paid off our mortgage in five years for the first house and seven years for the second.   Manage to a payment. So, instead of negotiating the price, say, 'I can only afford $X per month.' Okay, they'll finance those appliances for 10 years at 20 percent interest and your payment will only be $50 per month (from a coworker and a relative). I never took this advice."   Jeff White — Staff Writer at Fit Small Business Best and Worst Credit Advice: "The best and worst credit advice I was ever given was to use a credit card every month. On the one hand, this builds my credit as I pay it off every month. However, if I were to lose my job then it would become very easy to continue the habit of using that credit card since it helps me get things I now can't buy any other way. That could easily put me in a hole when I'm using a card without the funds in my bank account. Using credit cards can be great for people to build their credit or overcome extremely short-term cash flow gaps that they know they can pay off in a week or two. However, they also can be damaging to your future if you misuse them in any way. You should treat that responsibility the same way you treat a 16-year-old getting their driver's license for the first time — it's a great responsibility."   Your Credit Future When it comes to taking and following credit advice, first determine if the person giving you the advice is actually good with credit. For instance, if an aunt or uncle with a poor credit history gives you credit advice, let it go in one ear and out the other. Although it may be difficult to ignore bad advice coming from family members or close friends, your credit future will be much brighter if you only follow advice from those who expertly manage their credit and finances and if you do your own credit research.