Scared Spending: Not Every Purchase Puts Your Credit In Hot Water

Your credit can be incredibly scary, especially if you're in the process of rebuilding it. Anyone who has filed for bankruptcy, elicited the service of a debt consolidator, or struggled to keep their credit score over 600 or 700 probably is feeling a little scorned as they're slowly crawling back to credit respectability. For example, working with a debt consolidation company probably means that you had to close the credit cards that were included as part of your new monthly payment. The first few months after agreeing to combine your unsecured debt, you're not going to be able to apply for a credit card anytime soon. That likely results in you being a little skittish when it comes to any kind of spending or even getting back on the proverbial horse by applying for credit cards again. But as time passes, so should your trepidation about spending money. That's not to suggest that you should open a plethora of credit cards and go right back to square one as far as collecting comparable debt you had before. It just translates into reconstructing your credit with the types of purchases that won't affect it negatively. Using your debit card means very little if anything as far as your credit is concerned. Remember, that's your money and even using it for every single purchase won't create a sense of panic from creditors that are watching how you're spending money. Some experts will tell you that eliminating using your credit cards is both good and bad. The positive of saying goodbye to credit cards for a while after you've climbed out of debt is, as previously mentioned, not falling back into the same money pit you were in not that long ago. The safe bet is to simply set aside your credit cards for a little and go back to them when you finally begin building assets again. You have to keep in mind your credit depends on your debt to income ratio, so if you're not making as much money as you'd like to, it's all relative to how much debt you have. If you've just finished a debt consolidation plan and have very little, if any, debt, that means as much or more than what you're yearly wages are, as long as that number isn't ridiculously low. So stop being so frightened about moving past your credit and debt misstep and get on with smartly spending money again on your own terms.