Mad_About_Money_final Nov. 2016 | Page 19

MadAbout Money YOU HAVE THE POWER TO MAKE A POSITIVE CHANGE, AND YOU CAN START UTILIZING THAT POWER AS SOON AS NOW. FORMING GOOD FINANCIAL HABITS IS THE REAL “WEALTH,” MINUS TO CREDITS - PLUS TO WEALTH YOUR CREDIT SCORE IS AS GOOD AS YOUR DEBT SCORE Alas, your credit score is not an indicator of your good income or strong bank balance. It just tells you whether you are reliable enough to lend money to and your ability to pay it back. That’s about it. In simple words, no need to celebrate. Your credit score is as good as your debt score. To understand how credit score measures up, here is the calculation: 3 5% of your score is based on your debt history. A good credit score takes you places. You will find banks running after you, providing premium services, cards, and higher loans even if you don’t want them! But on a serious note, it takes you notches higher in eligibility with financial institutions, and it has nothing to do with you income. 30% is based on your debt level. 15% is based on the length of time you’ve been in debt. 10% is based on new debt. 10% is based on the type of debt. In other words, stay in debt for as long as you can. How ridiculous is that? INCOME IS A MINUSCULE PART OF THE EQUATION Also, even if you are rich but make bad financial choices, or delay in repayments negatively, it will impact your credit score. Since credit depends on so many different factors, income is a minuscule part of the equation. The best plan is to pay off all old debts and not open any new ones. Then perhaps you’ll become debt-free. Relieve yourself from all credit cards, car and student loans, etc. And one fine day you’ll knock off that last burden on your shoulders - the mortgage. As a result, your credit score will become “indeterminable.” This is great news! Through this technique, you can save a ton of money, and you’re able to pay in cash for all purchases. With this, you don’t need a credit score, since you don’t plan on using credit! Doesn’t this sound great! In case you are looking at improving your financial situation, wait for a salary hike or higher revenue in your business. Instead of depending on your credit score to improve your financial situations, cultivate good financial habits to improve your financial circumstances. You have the power to make a positive change, and you can start utilizing that power as soon as now. Forming good financial habits is the real “wealth,” and you can buy just about anything you wish. Learn the techniques of saving money and making the right investment choices. It will improve not only your wealth status but also your ability to stay off debts and increase your purchasing power. You will automatically get the best score amongst the banking institutions. So don’t keep praising your credit score because your life will be much better without it. Discard all debts, save money and pay cash. Do that, and you will be well on your way towards building wealth— not your credit score. 19