Spring Deals: Being Frugal For a Better Credit Score
Most of us like to find deals because it saves us money. We enjoy more stuff and we have to pay less for it. That’s the greatest thing ever, and that’s as much thought as most of us give to it on a normal day. However, there are bigger advantages to be gained from saving money on a routine basis. One of these is the wonders it does for your credit score. Here’s how it works.
When you only buy good deals, you have more money left over. This is one of the most important aspects of a good credit score. You sometimes hear it called the “debt to income ratio”. The companies that determine your credit score like to figure out how much income you have every month, and how much of that goes toward paying debt. If you don’t make enough money to service your debt, most often that held in credit cards, then you’ll see your credit score go down.
You only have to borrow money for the stuff that matters. Most people don’t think of credit cards as a way to borrow money, but that’s absolutely what they do. People who only buy the best deals don’t have to rely on credit as much as people who pay full price – their money just goes farther. Ideally, deal-hunters will only have to borrow money for the important stuff – like buying a house or a vehicle. In these cases, borrowing is totally appropriate, and can actually increase your credit score! To learn more about borrowing large sums the right way check out this PersonalLoans.com Personal Loan Review from AAACreditGuide.com.
Deal-hunters are more careful with their money overall. There are many things that cause a credit score to go up or down. Most of them have to do with everyday money management. If you don’t pay your bills on time or make your monthly payments on your credit cards or carry too high balances on those credit cards, your credit score is not going to be so hot. Deal-hunters are a frugal people, and this virtuous trait is often reflected in their superior credit scores.
People Careful with Money Buy Fewer Opulent Things. Most people with a lot of debt decided they just had to own fancy and expensive things that they just couldn’t afford. Consumer electronics, gadgets, brand new products – these are the kinds of things that people put their credit on the line for. If you are only going to buy something that is on sale, you can bet that your credit score will be higher, and you won’t be surrounded by possessions you don’t really need.
Being frugal is a lifestyle. Though it’s not always fun, it’s exciting to look for good prices. There are other rewards than the thrill of the retail hunt. People who are smart with their money have good credit scores and history which means it’s cheaper to borrow money when it’s absolutely necessary, and that less interest and fees will be paid on these borrowing instances.