Focus on Finance: Credit management of utmost importance for your future

By ROBERT WILKINS

Question: When did credit come to be?

Answer: We are a country in debt. A person once told me that it is the American way to buy things on credit and owe people money. While that might not be the best way to think about it, when the price of things such as vehicles and homes is well beyond what we would be able to pay cash for, we have to face the reality that credit is necessary.

In all actuality, the concept of credit has been around for a very long time. Anyone who is a fan of “Little House on the Prairie” knows that when the Ingalls went go to the general store, they always put their items “on account” which would be paid later — usually when the crops were in or Pa got paid from various jobs.

Back then, credit reports and credit scores weren’t necessary. It was an unwritten rule that accounts eventually would be paid. A man’s word was his name and that good name meant everything back then. Collection agencies weren’t necessary and accounts always were paid, even if took some time. Shop owners didn’t worry and were willing to wait. It was the law of the settlers, albeit an unwritten one.

Then we continued to want more and more in our lives and “stuff” became almost necessary in our minds. As time passed, accounts weren’t being paid and businesses were asked to take huge hits from people who reneged on their agreements.

This brings us to where we are today: a nation in debt. Even the federal government is in debt. It only goes to follow that citizens would be in debt, too. That said, we know we need credit to obtain the things we need — and often those that we don’t. Credit card companies are preying on people at younger and younger ages. Alarmingly, that puts many young people in debt before they reach legal drinking age.

That’s why it’s so important to know about credit and when it should be used and when it shouldn’t. Practice smart credit procedures and don’t overextend yourself. You can easily find yourself in trouble before you know it.

When the time comes to change your spending habits, make smart credit decisions and take steps to raise your credit score. No matter what situation you might find yourself in regarding your credit, you not only can get out of debt, you can restore your credit and enjoy a high credit score.

It takes time and effort, but it certainly can be done.

You just need to be diligent about your spending habits and then monitor your credit reports so you know where you stand at any particular time.

Credit is an important part of our society, so cherish your credit history and your credit score. Make it just as important to you as your good name and keep it clean and pristine. It can mean so much to your future and your future is just as important as the present.

Robert Wilkins is owner of Credit One in Elizabethtown.

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