3 Important Credit Questions to Ask Yourself

With the impact that finances have on one’s Life, ignoring your credit history and overall financial health can be a bad idea.

If you are struggling to pay your bills and scrambling at the last minute to do so, then it’s time to start asking yourself some hard questions about credit.

So, here are 3 important credit questions to consider:

#1: What is my debt costing me?

When you add the interest on all of your monthly statements, it’s going to motivate you to pay back off your debt. Now there are two ways by which you can approach clearing your debt. One is to pay off the balances for the cards that have the highest interest rates or starting off with the ones that have the lowest balances. No matter which approach you take, the important thing is to get started.

#2: How much of my income goes towards debt?

As a rule, banking institutions decide whether or not to offer borrowers credit by checking as to whether their monthly payments towards debt is at 36% or more. If you’re already at this figure then it’s time to stop applying for credit and instead undertake a serious debt reduction plan.

#3: Do I have a healthy credit mix?

Lenders always look for how you manage different types of credit namely auto loans, credit cards or mortgages. But that’s not all – 10% of your credit score is based on the type of credit mix that you carry. This should also clearly tell you that lenders and credit bureaus do not treat all types of credit similarly.