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The basics
Borrowing costs money. That is not necessarily bad. It just means
that when you pay it back, you have to pay more than you borrowed.
The components of a good debt strategy are quite simple:
- Choose when
to borrow and what to borrow for carefully.
- Find the
best interest rate and terms, based on your needs and wants.
- Live up to
your repayment responsibilities.
- Periodically
review your debt. Refinancing your mortgage or an auto loan may
save you money.
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Developing
and Using a Wise Borrowing Strategy
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The importance
of a good credit record
A good credit record does more than just make future credit approval
easier to get. Most lenders use your credit record to determine
credit limits and what rates to charge. A good credit record will
save you money. A program enables you to get a free credit report
once a year. You can request your free report at their website -
www.annualcreditreport.com. Otherwise you can order a report from
one of the three large credit reporting agencies. .
Order your credit report:
- Equifax 800/997-2493
- Experian
888/397-3742
- TransUnion
800/888-4213
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Review
Your Credit Report
Don't
Let Anyone Steal Your Credit Identity
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Consider
all the terms on all your borrowing
Comparing credit cards can be confusing. You have to consider interest
rates, fees and associated benefits. The right card for you should
reflect how you use it. If you pay the full balance monthly, the
interest rate is of little concern and you can focus on any annual
fee and benefits such as airline miles or cash back features. If
you carry over balances, the interest rate should be a top concern.
The right mortgage
" for you should balance interest rate, length, and down payment
requirements that fit your situation. Adjustable rate mortgages
usually have lower rates, but your payments may rise if interest
rates rise. Long-term mortgages usually lock in a higher rate. If
you expect to stay in your current home only a few years, an adjustable
rate mortgage may be best. If an increase in monthly payments would
be too painful, look at a fixed rate mortgage or an adjustable one
with rate adjustment limits.
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Guidelines
for First Time Credit Card Users
Evaluating
Mortgage Types
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