Would you like to know the “secrets” that people with top tier credit use that people with below average credit don’t seem to know?
As a mortgage broker since 1998, I have seen thousands of credit reports, bank statements, and loan applications. While there are always exceptions, here are five things differences between top tier and below average credit users.
Tips From People with Excellent Credit that Everyone Can Us
- 1) People with perfect credit have bank statements that show they do not spend money daily.
— People with below average credit have bank statements with debit card purchases made daily. They regularly spend at Starbucks, fast food, and convenience stores. They make emotional-buying purchases from TV shows like QVC, HSN, and others. They buy lots of clothes and shoes even though their closets are full. They are buying something every day. It’s like they can’t wait to spend what they just earned that day.
- 2) People with perfect credit shop for groceries weekly or less often.
— People with below average credit pop into grocery and food stores daily. They’re always picking up something to eat for the day, and overall this leads to higher spending on food. Every trip inside a store is an opportunity to buy a display item at the end of the aisle or pick up an extra snack.
- 3) People with perfect credit have modest car payments.
— People with below average credit have car payments that are too high for their incomes. On top of that, they might be financing two cars at the same time. Their transportation cost might even equal a house payment!
- 4) People with perfect credit show a bank balance that goes up each month. They are spending less than they earn, living below their means.
— People with below average credit show bank balances that either decline or barely break even. They figure they are doing fine, because they aren’t going into overdraft status. But they are not doing fine. They are spending money like there is no tomorrow, and they are neglecting to save.
- 5) People with excellent credit have savings for emergencies. When their car blows a part or the water heater goes out, they don’t have to borrow from a credit card and go deeper into debt. They have the savings to cover it. They don’t pay interest on the car repair or the new home water heater, because they didn’t have to dig into credit to pay for it.
Personally, I know what it’s like to live on a small income so that there is truly no money left over for savings. I remember replacing one package of ground beef with another, because it was a nickel less and my grocery money was that tight. This is not meant to judge people who are barely making it one week to another. But I will also tell you this: when I was poor, I did not spend money on lattes and Big Gulps and I did not buy movies or toys for my kids that I honestly couldn’t afford. My kids learned to respect, “We can’t afford that right now.”
I have seen bank statements with barely any money on the balance, and the people earn a six-figure income. Their bank statements go on for pages with daily purchases, non-essential items, impulse buys, multiple car loans. They never say no to themselves with presented with a “want.”
Yesterday, someone with top tier credit suggested that I share some money tips that everyone can use. I hope this helps at least one person.