Repairing your credit is more than just cleaning up your credit report, it is also about understanding and managing your debt.
What Exactly is Debt?
Debt is simply the money you owe; it is an amount of money or other property that is owed by one person, organization or company. Getting into debt is very easy and maybe it is fun for some people as it might impress them. At first look, people are happy, they can buy without having cash, and they can afford to get a car even without having the budget etc. but they missed the best part, they will live and drive this car for 12 years to make payments and pay huge interests for what already impressed them!
Much like cholesterol; debts come in both good and bad versions. Debts can make your life easier or more difficult but however bad your debt problems, there is a solution. People and businesses who know how to handle debts and how to manage their credit can take advantage of debts while people, especially the youth,債務舒緩計劃 who do not have great knowledge in debt management and creating debt reduction plans often find themselves in troubles.
A lot of the time, there are good reasons to take on debt. For example, students take loans which are a good thing, this can help you get to a position to take advantage of low interest debt to finance a quality education. The true test, however, is what you do with that, almost forgotten, debt once you graduate.
Further, taking on debt for business startup can be healthy. It provides you with needed capital without exhausting your personal funds and allow you to take advantage of time of opportunity for growth. BUT, you must have a clear plan on how you will use this capital and most importantly, how to pay it back. In many cases, debt is a part of the business success.
If you can afford to pay cash and limit the risk of taking debts, do it! Do not hesitate to pay cash when you have the surplus funds. The problem is when you borrow money but do not use it productively. More clearly, debts are good when you invest it and NOT simply spend it. Taking debts simply to spend it is where the problems start. Debts must be under control. You must know very well how to pay back your debts.