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Credit Score Reflection

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When I was growing up, I never understood what a credit score was. I would listen to adults talk about their credit score if their life depended on it. I had this mentality that I will never need to know my credit score. I also believed that I would never have to use a credit card. However, I realize that knowing your credit score and having a credit card can be beneficial in the financial world. The credit score that I received on credit karma by Equifax was 651. The rating scale says that this credit score is fair. I am actually happy and surprised about the score. I was surprised because I do not have a credit card, so I figured that my score would be lower. The score that I received is a good starting point to be at. I think what …show more content…

I will have to owe the bank roughly $9500. The way I am going to pay back the bank is by paying more than the minimum amount. However, I also do not want to pay the bank in large sums of money because then my budget would be chaotic. When I start off the payment plan, I want to first pay the minimum amount. I first want to see how the impact that the debt will have in my monthly budget. If I see that there is some extra money lying around then I will pay more than the minimum. I would also like to set up an emergency fund for three months in case I am having trouble paying back the bank. My goal is to pay the bank as soon as possible, because I do not want the interest to add up. If the interest adds up then the debt will start to increase rather than …show more content…

One advantage of having debt is it limits the urge to spend. For example, I would less likely make unnecessary purchases such as buying shoes and clothes if I knew I still have a debt to pay. However, having a debt could also be a disadvantage because sometimes it could take a long time to pay back the bank. I feel that that having a large debt would take control of how I live. In other words, I feel that my life would be miserable because every day I would have to think about how I am going to pay back the bank. The debt should not be easy to pay back, but at the same time the debt should not control the way you live. When taking out a loan, I should consider how the debt is going to affect me in the future. In conclusion, I now realize the importance building up one’s credit score. If I continue to have great credit, I will have more financial options that could help me in the future. I also realized that having a credit card is not so bad. A credit card can actually be beneficial by providing rewards and other deals. However, I should not take a credit card lightly because it is easy to fall in debt. I believe I am one step closer to take on the world of

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