Credit is an Asset Pt.1

Credit is a personal asset worth protecting. Yes you read that correctly. The debt you have to pay back after using some form of credit is the actual liability. But credit itself is a life asset. Credit has an impact on housing, insurance, employment, access to new/additional credit, and quality of life. Understanding how to utilize this financial tool properly with proper risk management is important to growing and securing wealth.

From my many years of experience in the consumer finance industry I know first hand that the average American doesn't truly grasp the concept of credit and how to use credit to his or her advantage. I’ve worked with clients from all demographics, professions, and income brackets and many people don't have a basic working knowledge of the 5 pillars of Financial Literacy and Success. Understanding these tenants will forever change your relationship to/with money for the better. The biggest misconception is that you have to be a high earner; but in reality the game of wealth creation and income generation lies in disciplined consistency which evolves into consistent returns. I’m “wordy” I know. Anyway.

To understand why credit is an asset we must first understand the underlying mechanics of credit and identify the influence this tool has and how to use it to your advantage. (A great example of the underlying mechanics of a system would be the steemit platform itself and its concepts of reputation, witnesses, curation, steem/steem power, SBD ext. All concepts I'm still trying to wrap my head around myself. I’m sure I will come to understand them better the more I participate in this space). Unfortunately, credit gets a very bad rep. I speculate its simply because the vast majority of people who use it don't understand the underlying game mechanics. Some of those mechanics include interest, the scoring system, type, term ext.

Credit is a very complex system, but important to understand because credit can determine if you are qualified to receives access to certain services, opportunities and/ or products. Unfortunately, Most people seek credit advice/understanding after falling into debt traps, or hardship such as death in family, or disability/illness. You don't want to be ever be in the position of being cashed strapped with no access to credit and experiencing a hardship. Those factors push people to do mad and desperate things. Working in consumer finance I saw it all. But the most important utility of credit that can be used to our advantage is credits ability to give you options.

Options are important and can mean many different things to many people. Having access to credit aka options can mean going on a vacation, paying for fertility treatments, paying for a funeral, wedding, ext. Having access to credit in when needed or wanted can be a powerful tool. I'll leave it at here for now, to be continued...

Can you think of someways that you can use credit to your advantage ?

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