It’s never too early for New York parents to start teaching their kids about credit. Unfortunately, a lot of adults have very little understanding about how credit works. Therefore, they misuse it, get into debt, and ruin their credit scores. However, future credit problems are avoided when consumers in New York teach their children the rules about credit use before kids have credit of their own. Also, when parents prepare what they want to teach their children about credit, they may learn a few things themselves. Even though, with something as important as credit, early learning is ideal, it is never too late to discover something new.
Six Important Lessons that Every New York Parent Should Teach their Kids About Credit
Many New York parents avoid talking with their children about credit because it seems like a daunting task. However, if you organize your thoughts ahead of time, and focus on important details, you can have very meaningful conversations about credit management, and the importance of credit scores.
You can’t ignore your credit.
Because it is all-too easy to make mistakes with credit, some New York consumers are tempted to never use it. However, if you do nothing at all with credit, it won’t be there when you need it. For example, if you don’t have a credit history, financing a car or home is difficult. Therefore, parents in New York should teach their children to use credit with caution – but not to avoid it altogether.
Late payments are never good.
Once they learn that using credit is a necessary part of most people’s lives, young New Yorkers should know that late payments are always bad. In order to earn and maintain a good credit score, you must make every payment on time, every time. Even payments that don’t normally count toward your credit score (rent, utilities, and cell phone bills) can count against you if they are tardy. This is because service and providers and creditors can always report your late payments and damage your credit score.
You should only apply for the credit cards you need.
All New York consumers should know that applying for a credit card causes a hard inquiry to appear on credit reports. Of course, hard inquires only take credit scores down by a few points. Yet, if you apply for several cards at once, this damage adds up. Next, if you get approved for all of the credit cards for which you apply, you must keep up with several payment due dates. For most consumers in New York, this gets confusing quickly, so it’s best to only apply for the credit you actually need.
You should never max out a credit card.
Not only does maxing out credit cards build up debt, but it also hurts your credit utilization ratio. Not every New York consumer knows this, but about 30% of your credit score is based on how much of your available credit you use. Ideally, your credit card balances should never reflect more than 30% of your spending limits. So, if you max out your credit cards, even if you make every payment on time, your credit score will probably drop.
Defaulting on a loan will destroy your credit score.
If you stop making payments on a loan, the original creditor may write off your debt, and this is where your real problems begin. First, the creditor reports the default to the credit bureaus, leaving a negative mark on your credit reports for up to seven years. In addition, debt collectors start calling, which frequently leads to seemingly endless harassment and frustration.
You should check your credit reports on a regular basis.
Finally, all up-and-coming New York consumers should know that checking their credit reports is an essential part of credit use. First, reviewing your credit reports at least once every 12 months allows you to look for signs of identity theft, such as fraudulent transactions and bogus accounts. Next, because about 80% of New York credit reports are flawed in some way, all consumers should routinely look for credit report errors that can damage credit scores. Just go to www.annualcreditreport.com to request your free annual copies of your credit reports from TransUnion, Equifax, and Experian.
Then, while looking over your credit reports, if you spot signs of identity theft, file a police report immediately. Next, contact Credit Repair Lawyers of America in New York. On the other hand, if you see that mistakes and errors on your credit reports have brought your credit score down, call our firm right away. Our credit pros will help you solve your credit issues, so you won’t have to deal with creditors and the credit bureaus on your own. We’ll also connect you with an experienced credit attorney who will do what ever it takes to get you clean credit reports – for free.
The Free and Legal Way to Get Better Credit in New York
Don’t let identity theft damage or errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Carl Schwartz at (646) 859-3045 or sending him a message through our contact page.
For more information about Free Credit Repair, please visit https://creditrepairlawyersam.com/credit-repair-free/. Or, to learn more about Free Credit Repair After Identity Theft, check out https://www.creditrepairlawyersam.com/new-york/fix-id-theft/.