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Control Credit

Credit is a tool and when used mindfully can help one achieve financial goals and weather an unexpected emergency.

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How to Take Control of Credit and Gain Peace of Mind

According to the Federal Reserve, 44% of the U.S. population does not have $400 saved to cover an emergency. That means an unexpected $400 emergency “expense would be more challenging to handle” and not to mention stressful if “they either could not pay the expense or would borrow or sell something to do so.”

Some of you may have felt the stress of needing money to cover an expense but have no savings and no access to credit. When you’re unable to cover the costs of emergencies, you’ll feel less secure.How to Take Control of Credit and Gain Peace of Mind 

Emergencies happen. It’s not a matter of if, but a matter of when they’ll happen. Everyone should have an emergency savings fund. And if you don’t have one, start one right now. 

But let me get this out of the way. I’m not opposed to the use of credit.

Credit is a tool and when used mindfully can help one weather an unexpected emergency. However, uncontrolled use of credit leads to long-term debt. Debt is a ball-and-chain that will make it more challenging to achieve your goals and pursue your dreams.

If you’re looking to have peace of mind, it’s important to have your finances in order and that includes a better relationship with credit. 

Learn more: Reduce Debt Stress and Improve Financial Wellbeing

Control credit and gain peace of mind

First answer the question: what does credit mean to you? What thoughts come to mind when you think of credit?

Understanding your thoughts and feelings about credit can help you uncover some limiting beliefs. When credit is misused it leads to high-cost long-term debt. And in some cases, credit is misunderstood and avoided causing issues when you try to find an apartment or shop for cell service.

Learn more: Top 12 Frequently Asked Questions on Credit Reports and Credit Scores

Take control and access your free credit report

Your credit history is compiled by private companies called credit bureaus. It is accessed by lenders to determine your eligibility for credit approval. Taking control of your credit means understanding what’s found in your credit report.

You can access your credit report through the federally mandated website AnnualCreditReport.com.

Learn more: How to request your free credit reports with Experian, Equifax, and TransUnion

Monitor your credit and protect yourself

Identity theft is a reality and can cost you time and money. Monitor your credit by reviewing your credit report along with a paid or free credit monitoring service. These services alert you whenever someone attempts to access your credit or sends notices about changes found in your credit report. Knowing when these happen sooner can help you respond quickly to any negative report or fraudulent situation.

Track and improve your credit score

Finally, you want to track your credit score. Credit scores are based on the information found in your credit report. Credit scores help lenders and you quickly determine how you’re using credit.

You want to maintain a high score by managing credit well and ensuring the information found in your report is accurate. If you come to learn your score is low or considered poor by creditors, it can signify that financial stress may be on the horizon for you.

Learn more: Is Your Credit Score Good or Bad? How to Make It Excellent.

So what happens if you find out you have a low credit score? By fixing your credit, you can improve your credit score which can lead to better financing options and terms.

Find free credit score apps in the financial marketplace.

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Jason Vitug

Jason is the founder of phroogal, creator of the award winning project Road to Financial Wellness, and author of the bestseller and New York Times reviewed book, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

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