As you enjoy the luxury of smashed avocado and steaming hot latte on a cool Sunday morning your credit card often suffers. One thing leads to another, your bills keep on piling up and the more you ignore it, the more your credit score will plummet. Unfortunately most finance businesses judge you based on your credit score and a low credit score can make your life difficult. The good news is that you can avoid bad credit by eliminating unimportant expenses.

A bad credit score has side effects that can be difficult to escape from. Some of these side effects include a low chance of loan approval, difficulty in getting a cell phone contract, employment problems, or being denied finance for a car.

To prevent these things from happening to you, follow these simple tips and avoid bad credit:

Proper money allocation

Allocating your money for bills and necessities is the first step in proper money management. You need to make sure that the necessities come first before the luxuries. When you have a roof over your head, a reliable car to get you to work and food on the table you’ll be thanking yourself.

Pay your bills on time

Do you know what’s worse than not paying your monthly bills on time? It’s the extra fees that add up costing you a surprisingly large amount.

Think before you spend

We are all a little impulsive sometimes. Spending too much money without thinking of the consequences can drown you in debt. Slow down and think about the purchase, is it something you can borrow temporarily, is it something similar to an item you already have? If the answer is “yes” maybe pop it back on the shelf.

Now that you’ve learned a few tips on how to avoid bad credit you might be able to re-prioritise and save a little. It’s always great to have some savings for a rainy day.

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