Personal Financial Management 

 Personal Financial Management 

Assignment: How is My Credit

 

FOR THOSE OF YOU WHO LIVE IN THE UNITED STATES:

Establishing credit and maintaining your creditworthiness are essential to your financial well-being. Good credit allows you to obtain loans and acquire assets that you otherwise might not be able to attain. This project will help you to examine your credit.

 

Instructions:

If youve already established credit, get a copy of your credit report from one of the credit bureaus mentioned in this chapter. (If youve applied for a loan recently, your lender may already have sent you a copy of your credit report.) Carefully examine your report for any inaccuracies, and take the necessary steps to correct them. Then look over your report and evaluate your creditworthiness. If you feel you need to improve your creditworthiness, what steps do you need to take?

 

Your submission should be a minimum of one page of content in length, answering each question with a substantive paragraph of 4 5 sentences in length. Please type the question as well as your answer. 

 

**My credit went down it is 640 right now, due to a consolidation of 5 credit cards and two little loans.

My husband and myself bought a house in 2020 in NYC. We have a mortgage.

We have two lease vehicles.

I have regular credit cards that I pay for that I use.

$2,000 and $4500.

I need to start saving for rainy days, also need to fix and repair my credit- so it can be in the high 700’s close to 800 credit score.

 

 

Chapter 6 and 7:

Required Text(s): PFIN 7Author(s): Gitman, Joehnk, and BillingsleyEdition: 7thYear: 2016ISBN:Digital/electronic Option ISBN:97803570336099780357033692

 

APA Format

KEY TAKEAWAYS BEFORE ATTEMPTING THIS ASSIGNMENT

Having a good credit score is an important part of financial security and stability. Establishing and maintaining creditworthiness is a key component of this, as it can determine if you can obtain loans, purchase assets, and access other financial services. In this project, we will explore the basics of establishing and maintaining credit, the benefits and risks associated with it, and proactive strategies you can use to improve your creditworthiness.
Establishing and maintaining credit is an essential part of financial management. According to WP Cunningham, MA Cunningham, and BW Saigo in their 2001 publication, understanding the basics of establishing and maintaining credit is essential in order to manage one’s finances properly. They explain that credit is the system that allows individuals to make purchases and pay for them over a period of time. To establish credit, an individual needs to demonstrate to potential lenders that they are able to use credit responsibly. This means they must show their ability to make payments on time and in full. Additionally, establishing a good credit history will allow individuals to access more credit in the future, such as loans and mortgages. Furthermore, it is important to maintain a good credit score, as this will impact an individual’s ability to access future credit. To maintain a good credit score, individuals must make payments on time and keep their credit utilization ratio low. Additionally, monitoring credit reports on a regular basis can help individuals stay on top of their financial situation and ensure their credit score remains high. In conclusion, understanding the basics of establishing and maintaining credit is essential in order to effectively manage one’s finances. (Cunningham, Cunningham, & Saigo, 2001).
Having good credit is important for businesses, as it can help them secure loans and other financing options. This is according to a study by JT Teng, published in the International Journal of Production Economics in 2009. Good credit is beneficial because it can help businesses gain access to capital and other financing options, such as lines of credit, that can be used to expand or invest in their operations. Additionally, having good credit can help businesses secure better terms on their loans, such as lower interest rates. Furthermore, lenders are more likely to be willing to offer financial assistance to businesses with good credit, because they view them as having a higher likelihood of being able to repay the loan. On the other hand, having poor credit can have a number of negative effects on businesses. For example, lenders may be less likely to offer financial assistance, as they view businesses with poor credit as having a greater risk of defaulting on the loan. Additionally, the terms on any loans that the business does manage to secure may be less favorable, such as higher interest rates or shorter repayment periods. Furthermore, having poor credit can limit the types of financing options available to businesses, as lenders may be unwilling to offer certain types of financing to businesses with poor credit. As such, it is important for businesses to maintain good credit in order to take advantage of the benefits it provides.
It is important to be proactive in managing one’s creditworthiness. L Oxelheim, T Randøy, and A Stonehill (2001) in their article in International Business Review found that creditworthiness is an important factor for success in business. They noted that creditworthiness is not a static measure, but one that changes with time, and thus proactive strategies must be adopted in order to maintain a high creditworthiness rating. Proactive strategies for improving one’s creditworthiness include maintaining a consistent payment history, avoiding late payments, and staying within the credit limit. Additionally, monitoring the credit report regularly and proactively contesting any errors is also important to improve one’s creditworthiness. Furthermore, Oxelheim et al. (2001) suggest that borrowers should also take steps to reduce the total amount of debt they have, as this will reduce their debt to income ratio, and will thus make them more attractive to lenders. In conclusion, adopting proactive strategies is important to maintain and improve one’s creditworthiness.
In conclusion, establishing good credit and maintaining your creditworthiness is essential to your financial success. It can help you secure financing for large investments such as a house or car without having to put up a large down payment. Moreover, a healthy credit score also helps when renting an apartment, opening a bank account, or applying for a job. This project has demonstrated that knowing and paying close attention to your credit is a vital component of responsible overall financial management.
Work Cited
T Randøy.”On the treatment of finance-specific factors within the OLI paradigm.”https://www.sciencedirect.com/science/article/pii/S0969593101000221
JT Teng.”Optimal ordering policies for a retailer who offers distinct trade credits to its good and bad credit customers.”https://www.sciencedirect.com/science/article/pii/S09
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