Lizy Hoeffer

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Using credit is not a bad thing!


So I think it’s safe to say that most of you know that there are a couple of famous financial gurus in the US who preach the importance of not getting into debt by never securing credit. I think there is a ton of value in only buying what you can afford, BUT, there are some serious financial consequences from living “off the grid”.

Now before you go all angry emoji on me… I am NOT saying that you HAVE to live off of credit, and if you have an addiction to shopping or spending and staying away from credit is the only way to control your habit, by all means STAY AWAY FROM THE CREDIT APPLICATIONS. Living in debt is absolutely not a healthy lifestyle, and if you pay extra on security deposits and insurance I promise you that will be a much better decision then spiraling out of control and paying hundreds more dollars in interest and penalties. However, if you do not fall into this category of compulsive spending and are like the majority of Americans who just don’t understand how the system works and why you need credit in the first place, this blog and video are for you!

You see, our entire financial system is based upon risk algorithms created by Trans Union, Experian, and Equifax to determine how likely we are to pay our credit obligations. If you decide that “credit” is not for you, then there is no way to gage what type of credit risk you will be, and most financial entities will penalize you and put you into their highest risk classification.

Having a credit payment history makes it possible for us to borrower money, have lower or no security deposits, better terms on mortgages, and help determine how much we pay for insurance premiums. Not only that, many employers review credit reports in their hiring process to mitigate the risk hiring the “wrong’ person. Not having a score or taking payment history seriously will cost you extra in fees, interest, and could also prevent you from getting your dream job.

It is my personal and professional opinion after working in mortgage finance for over 16 years that not having credit makes simple things more complicated and expensive. I believe that we are all capable of using credit responsibly, especially when you understand its importance in your life, and how much ignoring it or not taking it seriously will cost you. I made this video to highlight some of the ways you can use credit in moderation to give the benefit of maximum score potential but also not create a situation where you are living beyond your means. I hope you find the credit tips to be helpful and would love to answer any questions you have on the subject. Please feel free to comment below. I always love hearing from you!

Make it a great week!