Kris Chanatry - Credit Repair: Learn How to Protect Your Financial Freedom and Improve Your Credit Score Fast

Credit Repair

Learn How to Protect Your Financial Freedom and Improve Your Credit Score Fast

Kris Chanatry

Copyright 2020 by Kris Chanatry

All rights reserved

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Chapter 1: The Credit Picture

What Does Credit mean?

C redit means your ability to borrow money. People can borrow money for multiple reasons. It can be education loans, car loans, home loans, credit cards, etc. Whatever the reason may be, whenever you borrow money, you borrow it on the promise of paying it back.

The amount that you owe, or you have to pay back is known as debt.

You need the lenders and banks to trust you and have confidence in you that you are going to pay back what you owe. Building the lenders trust is called establishing credit. You show them that you are a trustworthy person, who pays the debt installments on time and you prove that you are strong enough to be able to borrow again in the future too. That is how you can have a good credit rating and a good credit record.

Whenever money is borrowed, there are monthly installments of the loan and then some other costa like fees and interest.

Advantages and Disadvantages of Credit Borrowing

B orrowing money from banks or lenders has its pros and cons. With credit, you can buy anything today and then slowly pay back the money over time, instead of having to wait until your savings allow you to buy your desired item. However, there is always a risk of overdoing it. When given the opportunity, anyone can go on a spree and borrow more than what they can repay within their means.

While credit provides you the opportunity to make major purchases in a flexible way with the money you have right now, there is a risk if you fail to pay on time, your credit record might damage. You can also potentially lose money on late fees if your payments are delayed.

While renting a place or hiring any local service providers becomes really easy with credit, you pay the price in terms of added interest later. And if your credit report gets damaged once, it becomes hard to get credit the next time.

The Problem with Credit

W e as a nation are an indebted country. The government is in debt. The majority of Americans are under the burden of debts. Its like a vicious cycle, growing bigger and bigger every day. Studies show that 90% of US citizens own at least one credit card. And we are using these credit cards way more than we should be!

On average, each American family has a balance of seven thousand to ten thousand dollars that they owe each year to banks. Every family has to pay more than $1000 in terms of interest on average. And that is only the average figure, some families have a lot more interest to pay each year!

US citizens have annual spending of more than One Trillion dollars on credit cards and over Five hundred billion of that amount stays as their debt every year. If this cycle of debts keeps on going at this rate, then one out of every hundred families would have to declare bankruptcy. More than 90% of the disposable incomes of the US nationals go into paying back the debts.