As families begin seeing the results of new asset-building credit lines, they may start feeling better about planning for their future. This is the time to help clients connect credit to their specific goals - whether it is getting a new job, buying a home, starting a business, going back to school, buying a car, or just planning for the unexpected.
Different types of financial goals require different credit scores and different short, mid and long-term decisions about how to deal with new and past creditors. A homebuyer client, for example, would have to make a different set of credit decisions than a micro-entrepreneurship client.
As a practitioner, you may consider working with your client to:
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Build credit into the budget
- Include Active Accounts into the monthly budget
- Track upcoming payments on an Active Account Payment Schedule to help ensure you make on-time payments.
- Re-evaluate budgets every six months to see if a higher credit score or new bank relationship can help you re-finance debt and lower your expenses
- Budget to save each month to pay back old debt. Once an account has gone into default or collections, it is better to save money and then negotiate a lump sum settlement with the creditor.
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