A Clay Advisors review by personal loans website Best 2020 Reviews, demonstrates that there are way too many Americans that have too much debt. Companies like Clay Advisors have been flooding the market with Personal Loan offers claiming to be able to assist those with poor money habits. But can they really do it?
Some financial planning decisions can lead Americans into a vulnerable financial position. Some of those habits are listed below:
1. Using Home Equity as an ATM
Many people believe that this practice is among the smartest money habits, but it is not! A HELOC (home equity line of credit) allows user to purchase anything at low interest rates. When you miss out on a credit card payment, it merely affects your credit history and rating. Doing the same with HELOC can put your ownership of the house at risk.
2. Overlooking Your Credit Report
Even if you ignore your credit report, a lot of other parties will like to have a look at it. Traditionally, these reports were merely used as part of the eligibility criteria for new loans and credit cards. Today, they are used in non-credit scenarios like bank accounts, insurance policies, bank accounts, and job applications. As a rule of thumb, check the following information in your credit report:
- Does it have your correct information like name, address, limits, and balances?
- Is there any account that does not belong to you? This can be a sign of identity theft.
- How are you running up balances?
- Have mistakes like bankruptcies, collections, charge-offs, and late payments been removed?
3. Paying Late
Even if you do not struggle from any money issues, but end up paying late bills, your credit score can plummet. As a result, your creditors can increase your rates or end your credit line whereas the ones in the future may charge higher rates or reject you. Moreover, late payments can make you pay for additional charges. Since, this is one of those money habits that is easy to get rid of, start paying on time from this moment on.
4. Co-signing Loans
Co-signing a loan can land you in mess. Often, the other person ignores it, which means the burden falls on your shoulders. With late or missed payments, your credit score can take a hit and as soon as it drops down, creditors are certainly going to be ruthless. They will increase interest rates and cut credit lines.
In the best-case scenario, if your co-signer is punctual with all the payments, the card limit or loan balance is still going to be the part of your existing obligations whenever you go for a new loan.
5. Spending More Than You Can Afford
Spending more than you earn is common, yet it is one of the worst money habits. You can avoid this situation by paying with cash or a debit card – one that does not offers overdraft protection with your account.
By making sure that you don’t commit to any of the money habits mentioned above, you will become a lot more efficient with your savings and manage your debts better.