False. A low credit score means you will have to pay more interest when you borrow money. But you can raise your credit score. By paying your bills on time (more than the minimum due, if possible) and reducing your debt, you can slowly but surely improve your credit score and become more financially stable. Two other tips: Try not to open a lot of new accounts in a short period of time, and try to pay off your credit card debt rather than moving it around to other cards. If you have multiple credit card accounts open and you want to close one or more, be sure to look at your overall financial situation before doing so.

Credit can be very useful if managed correctly. A good example is when you borrow money for something that will increase in value (such as a house). Loans you pay off monthly over time, like mortgages or car loans are considered “good debt” because they allow you to budget for the monthly expenses and build a history of paying bills on time. That payment record can improve your credit score, in contrast to unsecured loans like credit card debt, which can spin your monthly expenses out of control. If you can’t afford to pay these bills, you can end up paying higher and higher rates of interest, which can help ruin your credit. The important thing is to make sure you will be able to make all of your payments on time and in full before you take out any kind of loan.

This idea couldn’t be further from the truth! Everyone, no matter their income, can create a budget, develop a plan for paying their bills on time, and strive to live within their means. Yes, for many of us, it can be hard to live within a budget and even harder to save money. But financial planning can help. It involves adding up how much money you need to spend each month for essentials (e.g., housing, food, phone, utilities), subtracting that total from your monthly income, and seeing how much is left for things like an emergency fund or retirement.

There is always hope! If your expenses are greater than your income, now is the time to put a payment strategy in place. Prioritize your bills so that you are paying off the most essential ones first, as they can have a major impact on your credit score. When it comes to credit cards, pay off the card with the highest interest rate first. You can also call your creditors to ask for a lower interest rate. Medical collections have little effect on your credit score, and payday loan payments have no impact on your credit score.

With a budget strategy, it is possible to get to a place where you are spending less money than you are bringing home. Once you can realistically afford to take on a new obligation, like a car payment, be sure to consider all your options, such as financing versus leasing, or buying a new car versus a used one. Don’t forget to consider the cost of insurance, gasoline and other maintenance.

Life happens, and unexpected financial emergencies can occur. Therefore, it’s important to maintain some level of savings if at all possible. Even without savings, there are ways to navigate such an emergency, including consulting with a trusted source to identify your options. If you must get a loan, shop around for the best interest rate and terms.

On the contrary, as a co-signer, you are legally responsible for that loan, so it directly affects your credit score. You can be held fully responsible for the debt, and that loan is reflected in your credit score.

Bankruptcy is an extreme solution for those who cannot make payments on their debt. There are many downsides associated with it! Declaring bankruptcy is very serious and can damage your credit score for seven to 10 years and can even make it more difficult for you to rent a home or get a job. Before declaring bankruptcy, discuss your options with a nonprofit or an accredited credit counseling agency with certified counselors. They will help you create an action plan to assess all of your choices before you make a final decision. Don’t be duped by debt settlement advertisements, most of which are from for-profit companies that want to make money from your situation.

The more purchases you make online, the greater your risk of having your identity stolen. However, you can protect yourself:

• Protect your passwords for critical accounts such as credit cards, banks, and cell phones. Do not use the same password for all your accounts and avoid using passwords that are easy to guess.
• Keep your personal information in a safe place.
• Never give out personal information on the phone, through the mail, or online unless you initiated the contact or are sure you know with whom you are dealing.
• Never throw bills or credit card slips with personal information in the trash. Shred or rip into little pieces all mail that identifies you or your accounts.
• Read your credit card, bank, and phone statements carefully each month to spot transactions or calls that you did not make.
• Request a free copy of your credit report on an annual basis at www.annualcreditreport.com.