“The Credit Robbers” - Credit Scores and Credit Rating Affected By Income and Spending.
Credit Scores and Credit Rating Affected By Income and Spending.
Gathering the information necessary to compare your income with your spending can be quite eye opening for most people and will have a direct correlation to your credit score and credit report.
By doing this over the period of the previous year, you will get a better understanding of where your money has been going and why you have landed in a situation where the debt is overpowering you and points directly on why your credit and credit rating is suffering.
Your income is easy to sort if you are paid wages, as that will be fixed for the year. It would also be relatively easy to make a list of the fixed expenses such as your rent or mortgage, your insurances, and other such factors where you know the exact amount that you are paying each month.
You can make estimates of how much you spend on your shopping for necessities and while you might make an attempt to calculate how much money you are spending each and every week. Almost everybody who does this exercise finds that they have underestimated considerably the amount of money that they have been spending and it quickly becomes obvious why their overall credit is suffering due to increasing debt.
If you are able to calculate how much money you had in the bank and how much debt you had at the beginning of the year and then add and subtract your income and your expenses as you have already calculated them you should come up with a balance of where you would expect to be now. Congratulations if you have your debt under control.
The next step obviously is to calculate exactly where you are now. The difference between that figure and the previous figure is the amount of money that you have been spending without even realizing that you were spending more than you had to spend. You will quickly realize, if you have not already, why your credit is suffering and the need for credit repair.
So where did all this money go - you might ask yourself?
Often it’s the little things that you don’t consider worthwhile recording such as the cup of coffee you have every day, with all the extras - Starbucks says thank-you for your contribution. It might be the occasional fast food takeout that you have once or twice a week. Maybe it’s the magazines that you buy each week or some other relatively small expense that adds up with all those other relatively small expenses to create a big deficit in your finances over the term of the year or so. This number can be in the multi-thousands of dollars for some people. Just $10 spent per day on the little/unnecessary things will tally over $3000 per year!
These are the areas where you can cut back or eliminate spending that will have a huge impact on your ability to reduce your debt and remain debt free once you have put yourself in that position. Once this is done, and only if it is done, will you have a fighting chance to protect your credit, credit score, and credit report.
Bottom Line - Many little expenses can add up to one big debt, which adversely affects your credit rating and credit score.
Dr. Robert Miller, PHD
Investigations Analyst
www.TheCreditRobbers.com
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