Have you ever heard the word bad credit? Bad credit is a condition where a debtor or a credit agent cannot afford to pay credit at a specified time. In everyday situations, it usually happens to us as credit card owners. We are unable to pay off our installments or credit cards.
For those of you who like to use a credit card or installment program, don’t be afraid. Not that, we cannot use credit cards or installment programs. Of course installments have their own benefits. However, we still have to anticipate bad credit in the future. How to? Next Billie gives 4 ways to avoid bad credit.
Avoid consumer debt
When you do unnecessary shopping activities. Avoid using a credit card or installment program for this. Why is that? This is because usually shopping or other consumptive activities are only used to satisfy themselves and not for purposes. We recommend using a credit card and installment program to buy items that are really needed. Like, cars, motorbikes, mobile phones, and for urgent matters such as home renovations, operating costs and so on.
If shopping for items such as clothes, bags, shoes and so on, you should not use a credit card. When you use a credit card for consumptive activities, you will be affected to do this many times. The money you save also can eventually run out for unnecessary things. When you need it, instead you are forced to pay off unimportant installments.
Borrow according to ability
Many Indonesians have credit card limits that are far from income. Alias are greater than income. Ideally, the number of credit card loans or large installments does not exceed 35% of income. Never lie about income to get a higher credit card limit. This will motivate you to shop and buy goods. Instead, credit cards are only used for goods with a long useful life or sudden needs.
Borrow as needed
As was said before. Avoid using a credit card or installment program to buy the desired item, not what is needed. When you are not able to distinguish or manage your needs and desires, you will only be trapped in various financial problems. Even though the ideal goal is financially to achieve financial independence. But due to not being able to resist the temptation of yourself or the desire to spend money, the opposite happened.
Do not avoid repayment obligations
Another thing that can cause bad credit is to avoid repayment obligations. This problem usually starts from a moment of laziness to make installment payments. Delay payment time or use installment funds for other needs. If things like that continue, the ability to pay installments will get smaller. Plus the installment interest continues to accumulate. This will certainly cause you to not be able to continue repayment payments and eventually there will be bad credit.
Well, that’s the 4 ways to avoid bad credit that Billie can give you. Don’t experience this!