| Many people who are interested in achieving | | | | how credit is to be used. Until this shift in |
| financial freedom are asking about the role that | | | | character (personal credit) is made, this person will |
| their credit plays in the process. This can be a | | | | continue struggling in their financial life, mostly to |
| complicated issue unless you have a solid | | | | preserve their financial credit and to keep current |
| understanding of the proper way to use credit, | | | | with their payments. |
| and the banks certainly aren't going to educate | | | | A wise man once said: "The rich rule over the |
| you when it comes to that. The banks and | | | | poor and the borrower is a slave to the lender." |
| lenders are, and always will be, out to increase | | | | This was a very long time ago, but nothings |
| their bottom line at your expense. What you need | | | | change since then when it comes to the role of a |
| is a good solid understanding of how you can beat | | | | borrower and a lender. The lender almost always |
| them at their own game and use credit to | | | | comes out ahead. That is, unless you have a rock |
| advance your simple personal cash flow plan... | | | | solid plan of action for how you're going to use |
| A New Way of Understanding Credit | | | | your good money habits to get yourself on the |
| There are two types of credit: your financial | | | | right side of the credit debacle. |
| credit and your personal credit. Your financial | | | | Proper Use of Credit |
| credit is represented by your credit score and | | | | The only way to use borrowed money to |
| your credit report, your personal credit has to do | | | | advance in your financial life is to have a proven |
| with your character and credibility when it comes | | | | investment strategy such as real estate investing |
| to handling money. Are these two types of credit | | | | which you can use to leverage the money you're |
| the same thing? Some might say yes, but I say | | | | borrowing. Using borrowed money to pay your |
| no. Have you ever known a person who has a | | | | expenses or to handle emergencies or just for |
| great credit score but who has used their credit | | | | pleasure spending is always a trap. However, if |
| to borrow so much money that they no longer | | | | you have a proven investment plan which you |
| have any room for investing or setting up cash | | | | know you could create much more success with |
| reserves in case of an emergency? | | | | if you just had more money to use, borrowed |
| This is a person who has abused credit and has | | | | money can be a great tool for creating financial |
| borrowed themselves into a corner because of | | | | freedom. |
| having a good credit score. If they have a financial | | | | This will also help you to build the character and |
| emergency, they have no cash to handle it, the | | | | the habits which will help you to make the most |
| only thing they can do is use their "good" credit to | | | | of the money that you have and be wise in all of |
| borrow more money. This is not responsible | | | | your financial decisions. This is the proper use of |
| financial management, and the only way to get | | | | credit when it comes to achieving financial |
| out of this trap is to make a shift in attitude and | | | | freedom. |
| habits about how money is to be managed and | | | | |