Borrowing can be a sensible way to invest in your future, but it can also get you into financial trouble

Sensible borrowing should promote your financial health in the long-term. Mortgages and student loans are examples of positive ways to invest in your future. Borrowing for things that you want but don't need, takes away from your future self and negatively impacts your financial health. For example, credit card debt or unnecessary loans to pay for day-to-day expenses can get you in financial trouble if you aren't paying off the full balances every month.

Get the most out of responsible borrowing:

Build a solid credit history
Credit reports may affect your mortgage rates, credit card approvals, apartment requests or even job applications. A longer history of on-time payments will make a big difference in the rate you pay when you're ready to borrow. A smart tip is try automating your bills so they don't get lost in your daily routine and always get paid on time.

Monitor your credit regularly
Everyone is entitled to a free credit report each year. It helps you correct any errors and spot potential identify theft. Get your free credit report at

Shop for the best interest rates
Check your local banks, credit unions, and online lenders to find the competitive rate that will best fit your needs. Take the opportunity to refinance your mortgage when rates are low.

Pay off high interest debt quickly
The cost of high interest debt can keep you from saving and might impact the quality of your overall financial health. Once you pay this off - work hard to keep it off.

Make larger payments
If you're buying a house, making a larger down payment can get you a lower interest rate on your mortgage. Also, making payments every two weeks instead of monthly will help you pay off your loan quicker.

Home equity loans
The best use of equity loans is to reinvest back into your home. Any improvements you make should give you a sense of accomplishment and increase your home's future value.

Avoid what we call "financial patches"
Pay day loans or withdrawing from your retirement accounts early are examples of decisions that can hurt you in the long run.


Take smart steps toward financial wellness

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