Credit is your financial character that tells companies and businesses whether or not you have integrity and are worthy of investing in as a financial risk. For years black people have slipped behind the eight ball when it came to credit because no one really told us how important credit was when it came to our future. Blacks have learned to live on getting by with the cash they had on hand. In today’s world however, if you’re looking to grow a business or own a home, you need more than cash on hand most of the time to accomplish these goals. Therefore, having good credit is becoming inevitable.

Having is a tool that can be used for good but may be problematic if you don’t know how to use it effectively. Using credit reliably and earning good credit scores can help you build wealth and allow you to do business with companies — but you can get into trouble if you don’t understand how credit works.

• • • • Credit Can Affect Where You Live
      • Auto Loans Require Good Credit
      • Credit Checks For Employment
      • Business Loans Require Good Credit
      • Living Expenses Can Require Good Credit
      • You Need Good Credit To Live Comfortably
      • You Need Credit When In An Emergency

While it’s easy to relish in the good times, it’s vital to always prepare for the worst, including times of a weakened economy. It’s the unfortunate truth that when there’s an economic downturn, there are often job losses and salary cuts. It’s a smart idea to establish an emergency fund when you’re financially stable, however, maintaining a high credit score is important in the event you need to take out any sort of loan, or new credit card.

Here is the sad truth. Most black people start behind the eight ball when it comes to credit. They do so because most were never really taught how important credit was in this world until they ruined their credit and in most cases, they don‘t just ruin their credit they ruin their child’s credit as well because they don’t take time to fix their own.

Borrowing your child’s credit is the worst thing you can do to them. You take away the one fighting chance they have to make it financially in the world.

After all, credit is ruined then black people destroy their financial status even more by using check cashing places, car title places, and short-term loans with crazy interest. Here are the facts. If you want to do better with your credit there are short easy fixes that will get you out of the debt and rebuild your credit.

First, NEVER use a credit repair service because when you use a credit repair service it shows that you are not mature enough to handle your own financial situation to creditors.  In addition, most credit repair services wait until they can settle on accounts before making a payment, so while you’re paying them hundreds of dollars towards a bill, they are paying pennies on a dollar to get you out of debt.

Second, before you pay any money to anyone please contact all credit bureaus (TransUnion, Experian, etc.) and pull your credit. When you pull your credit look at all derogatory reports on your credit. Anything that is older than 5 years disputes with the credit bureau. By disputing them, the company has to prove that you actually owe them money. If they have no proof they have to take it off your report. Many companies will have closed and/or lost information, so there is a chance you could have a lot of information leave the report and you own nothing.

Third, once you are done disputing everything when you fix your credit and get out of debt, start with the smallest bill on your credit first and work your way up to the largest bill you need to pay. Working on the smallest bill will get you into the habit of making payments and it will give you small accomplishments to see when you start fixing your credit.

Fourth, sign up for a credit scoring app like credit karma to keep an eye on your score. It will help you stay on track and be an encouragement when you start cleaning up your credit.

Fifth, always ask for settlements on every account you have before you decide to make payment. Settlements are how you pay pennies on the dollar for bills. It’s a quick and easy way to get your account caught up and it adds points to your score once you pay in full.

Finally, keep records of all your payments for at least 5 years. Many companies will come back to collect again, and if you have no proof, you end up paying again or having your credit ruined again. If you follow these recommendations you will be out of debt within a short period of time and can work towards rebuilding your credit.