Beamer, Benz, or Bentley, Beamer, Benz, or Bentley…
You would be lying if you said you did not harmoniously channel your inner rap artist and spit those lyrics like hot fire when you read that introductory phrase. For others, who may not be as familiar, Beamer, Benz, or Bentley was one of the hottest rap songs of 2010 released by Lloyd Banks featuring Juelz Santana. The song was one where everyone knew the lyrics and it became a hit on the charts at that time. I encourage you all to check it out if you haven’t.
The premise of the song’s hook (Beamer, Benz, or Bentley) basically engaged the audience with the thought of owning luxury cars (Mercedes-Benz, BMW, and Bentley). At the time the represented the American dream, and in a lot of ways still does. We all want to have luxury assets and nice things. It makes us feel good about ourselves and gives us a sense of pride by working hard to accomplish something and actually doing so.
So how do we get our luxury cars, homes, and clothes? Building credit is key when it comes to acquiring assets and building/maintaining them. The world’s most wealthy would all agreethat credit is key when it comes to building sustainable wealth. Credit is said to unlock the doors to any and everything you want in America, however, most people fear the very word–credit. Let’s face it, throughout our adult lives we’ve all made some good credit decisions and some we’re not so proud of. The silver lining is it is never too late to work on it and with my tips below you’ll be on your way to owning that luxury Beamer, Benz, or Bentley you’ve always dreamed of.
1. Monitor Your Credit
My first tip is to always monitor your credit! According to reports from the Consumer Financial Protection Bureau (CFPB) far too many people neglect to request and monitor their credit report annually. It’s recommended that you pull your report annually and check for inaccuracies. This is critical to building and improving your overall credit score. Small inaccuracies can affect your credit score in a negative way and a simple letter to dispute inaccuracies can dramatically improve your credit score in 30 days or less.
There are several ways to monitor your credit for FREE. My personal favorites are Credit Karma and also Annual Credit Report. These Digital platforms will allow you to get a copy for FREE of your credit report both online and mailed out to you. So if you haven’t done so TODAY go pull your report and inspect to ensure everything is accurate and up to date.
2. Credit Utilization
In my professional life, one of the biggest mistakes I seeclients make is to get several credit cards and not fully understand how their use effects their credit reporting. Credit card use is one of the leading causes of debt in America. Analytics at NerdWallet 2017 reports that the average American household has over $15,654 in credit card debt with a national debt of $905 billion.
While these statistics are alarming, the biggest mistake I’ve seen folks make is to pay off one card and immediately call and cancel it. You’re wondering, why is this wrong? It makes sense to cancel it because having the option with no self-control to spend will only get you back to owing high balances right?
This approach and thinking, while normal, isn’t the best approach. Your overall Credit Score is determined by creditworthiness and calculated by payment history and credit utilization. Long story short, keep the card open because lenders rate your “creditworthiness” based on existing credit lines and trustworthiness. Another good practice to only use 30% of your cards available credit. Keeping this in mind can help boost your score dramatically when practiced consistently.
3. Get New Credit
This approach is one people are often afraid of. Typically if you struggle with credit health the last thing you want to do is get a new credit product. However, this solution might be one that’s perfect for you. Credit history and open credit lines are additional factors that go into determining your score and can often increase your score in the long run.
Opening a new card, loan, or credit product and making on-time full balance payments can increase your overall score and add to your overall credit history. This approach, while more long-term, can dramatically increase your score over time and increase your creditworthiness.
Use these tips and get started with building credit or even repairing your credit so you too can have you Beamer, Benz, or Bentley. Building wealth starts with good habits, discipline, and consistency. Practicing healthy credit habits can dramatically increase the quality of your overall life when done correctly. Go be great my friends!