Protecting Your Credit

Using a budget also gives you a proactive way to protect your credit. Not overspending helps ensure that you’llhave enough money every month to meet your loan and credit card obligations. If you don’t follow your budget and fall behind on payments, it could damage your credit score and ability to borrow in the future.

If you budget carefully, you also should be able to limit all but essential uses of new credit. When you think about borrowing, figure out whether you can adjust your budget to cover the added cost—before you complete the loan application.

Delaying loan payments, missing payments, or borrowing to cover living expenses put your credit at risk. Using new credit to pay off old debt also is a sure sign of trouble. If either of these describes your situation, you may want to get some professional help in reworking your budget.

Page (13/14)