Nowadays many people are really focusing on getting back to basics. It was not too long ago that many people abused credit and used it for things they wanted rather than saving up and buying them cash. It was a different time then. Now things cost a lot more than just a few years ago and maxing out a credit card is just not something you want to do. Credit should be used wisely and only in unforeseen circumstances. Being prepared by following and sticking with a monthly budget will help you to achieve the peace of mind you deserve.
Credit is a Privilege
While you like many others probably have a lot of unnecessary revolving credit accounts you should avoid using them and rather close out all but a few. Having credit is a privilege and should not be abused by using it for successful outings containing purchases that are not necessary. With the banks tightening up on their practice of extended credit getting back on course is important to maintaining a good credit report.
Why Overextending Yourself is Never Good
Unfortunately many people today are in way over their heads. They borrowed more than their home was worth because they could and credit cards were used for everything from groceries to gas. The problem is that now every penny that comes in must go out to pay for these expenses. It can happen overnight, one day you wake up and realize that the money you are earning is all owed out. Not a good place to be. With everything now costing more than ever before being in this predicament is a set up for disaster.
The problem with being overextended is that now when something does malfunction and needs to be replaced you do not have the money for it. If you borrow from your income then something is not going to get paid. This one item can back up a budget for three months. Since the banks are not willing to lend turning to them for extended credit or a personal loan will be difficult if not impossible. There are many reasons for this such as debt to income ratio and credit score. Since you have maxed out all available credit and your debt to income is less than desirable the bank will see you as a liability. Even if you have managed to retain a good standing on your report the debt to income will get you a denial from the bank.
Where Can You Turn?
The answer is a secured loan. The secured loan will enable you to get the repair done without taking funds from your monthly budget. They are not based on debt to income or credit scores. The people behind these loans understand that sometimes everyone needs a little help. The requirements for these loans are simple, an active bank account and steady income. While you do not want to borrow unless absolutely necessary, a secured loan can help you in an emergency. By using their short term loan you can still pay your bills on time and avoid taking a hit on your credit report. The repayments are affordable and the best part is that the money is available within days, not weeks as sometimes a bank loan can take.
Understanding that you must prepare for a rainy day will help you to live a happy and successful existence. Rewarding yourself with a large item by saving for it will help you to develop good habits that can last a lifetime.
Paula Whately is a blogger who believes that a secured loan is a great way to ease your debt issues and get your finances back on track.