Despite a high unemployment rate, there are still plenty of workers who have seen the shinier side of the job coin. Congratulations if you are among the lucky few who have enjoyed steady and even gainful opportunities in your career. Security and satisfaction are perks to enjoy, but don’t get too comfortable yet. Maintaining your good fortune requires a healthy dose of common sense. Read on to learn about the common side effects of financial satisfaction—and the dangers they can pose to your credit score.
Side effect #1: The dollar loses its value.
It’s one thing to pay an extra $0.45 for milk; it’s quite another to lose your sense of financial responsibility. A surplus in your bank account may feel like a free pass to spend, but carelessness is likely to lead to bigger problems down the road. Consider the following example:
John is a software engineer at a well-known tech company. He is doing well at work and recently received a large bonus. In need of a new car, John decides to spend his entire savings account on a $43,000 BMW 3 Series. The following month, John’s company merges with a competitor, placing his job security in question. With an empty bank account and an overpriced car, John is beginning to regret his decision.
You know what they say about counting your chickens. Don’t discount the value of a dollar or saddle yourself with a false sense of security. Change can happen quickly. Stick to the principles of credit repair when making any financial decision.
Side effect #2: You don’t “need” anything.
When it comes to stuff, you’re tapped. You’ve got a nice house, car, and low credit card balances. Life is good, right? Why focus on credit repair? Here’s the catch: While you might not need your credit score today, you have no idea what could happen tomorrow. Suppose your mortgage lender calls with an offer to help you refinance. A lower interest rate could save you more than $100,000 over the life of your loan. The only problem? Your credit score isn’t good enough to secure the deal. The lesson: While you may not “need” anything, the world is still full of opportunity. Keep your credit score in fighting form to avoid missing out.
Side effect #3: You think success equals credit repair.
The credit bureaus don’t care about your income or length of employment. In fact, your net worth has nothing to do with how high your credit score will rise. Stay focused on the five factors of credit scoring. Sure, you might be able to afford your electric bill, but your credit score will still suffer if you pay it late. The bottom line: Success is measured in many ways. Measure your credit success by what you do instead of what you have.