Using Credit to Get Ahead
Using a credit card (properly) enables you to build an excellent credit report and achieve a top tier credit score. Why is this important? Because you will qualify for lower insurance premiums, the best auto financing, and the best home loan for buying a house or condo. Without good credit, the only auto loan you can get carries a high interest rate which is like throwing money in the garbage. With good credit, you can build your personal wealth in real estate-and there are so many reasons for doing that.
When you buy a home you stop paying your landlord's mortgage and pay your own. You are not vulnerable to the landlord raising rent or evicting you if he or she decides to sell. One day, you can own your home free-and-clear. You may choose to rent it for additional income and buy another home. Or, you may sell it for a nice profit. In the future, you could downsize and pay cash or have funds to move into assisted living, if the need arose. You can decorate the way you like, have pets, and be free of other landlord restrictions. Home owners can take advantage of income tax deductions that aren't available to renters. If you're short on cash in your senior years, you may opt to get a reverse mortgage to collect a nice monthly check for as long as you live in the house, even if all the equity is gone.
Owning a home is beneficial on many levels, but how will you buy a home if you can't qualify for a mortgage? A mortgage lender is not going to hand out three or four hundred thousand dollars without first seeing that you are credit-trustworthy.
Since credit is so important, you need to understand how it works and take control of that part of your life.