An introduction to credit as it applies to a musician's finances.

I have already outlined that as an artist, you're main assets will be creativity, knowledge, and credit.  I can't stress credit enough.  Times are quickly changing, and for the most part, we artists are on our own.  With good credit, there's a lot of ways to create shortcuts to success.  Credit can get you a car, a house, and even an income on the side - much quicker than a record label can(even under the older system where they'd advance you money for these things and screw you when they took it back out of your royalties).

The first thing to check is whether you have good credit.  If you don't (contrary to what every other jackass who thinks they know anything will tell you), you can build/improve it relatively quickly.  First thing... NEVER LISTEN TO THE ADVICE OF A CREDIT CONSOLIDATION COMPANY UNTIL YOU HAVE DONE YOUR OWN RESEARCH - THEN GET AT LEAST 5 OPINIONS.  Those types of companies make a serious commision of of every service they provide, and usually credit councillors will in some way act out of self-interest.

I just googled "what is considered good credit" and in the first result found this phrase in the article:

"Actually to merely get a good credit rating, some agencies, like Fannie Mae consider that 620 is good. They will offer you a prime rate. On the other hand, some sources, like the PBS show Frontline have suggested that 770 is the optimal credit score. Most companies do say that you need at least 650-690 in order to have a good credit rating. An optimal credit rating is always considered over 700, and usually in the mid 700s."

This was only true for the couple of months right after the fall of the mortgage industry.  Mostly, this is untrue.  This is where creativity and knowledge come into play.  First thing to know... only like %5 or less of people in the western world have a 770 credit score. only ten percent have a score above 700.   650-690 truthfully is a good rating. 600 to 650 is still workable.  I bought my house at teh tail end of the recession with a 620 credit score, and got a pretty damn good interest rate.  For a car loan, or a line of credit, you can still do pretty well from 500 and up.  Credit is scored out of 900, for those who don't know.

Here's some misinformed things people will tell you about your credit:

Establishing a good credit history has never been as important as it is today.

This is true to an extent, but they will tell you that if you have bad credit, you'll never get a job or an apartment or a deal on a cell phone or car insurance.  Your credit can't effect any of these things.

-Job, how is credit a concern of theirs?  A criminal record might be, but your credit isn't unless you are up for a job that involves a company credit card, which, lets face it, if anything in this article is news to you, then you are not.  Not to mention, what happened to being a musician for a living - self employed, homey, that's the way to go.

-Apartment, maybe, if it's a large property management company.  Remember, don't give your credit information to anyone unless you REALLY have to. If it's a problem to get an apartment and you have bad credit, rent a basement apartment from a homeowner.  Sometimes you have to lower your standards for a year while you fix your life, we have all been there.  Also, remember that every time someone checks your credit, you lose like 10 points... so don't go passing it out to dumbass landlords or their staff.  You are really, at that point, giving them everything they may need to steal your identity.

-Cell phone?  looooool.  If you have a credit score that still has a pulse, you should be able to get a cell phone these days, there's too much competition.  If not... pay as you go isn't as stupid as it was ten years ago, it's actually pretty cheap.  Again, it's only temporary.

-Car insurance, this is the funniest one.  Think about it.  If you have bad credit, you aren't likely to be buying a Benz.  For a 5000 dollar car, a car insurance company makes their money back in your payments in like 2 years - assuming you have crashed and written it off - don't drive like an idiot, because you probably have your gear i nyour car and you're on your way to a gig or rehearsal.  If you don't write the car off, they make a lot of money off of you for nothing, thus your credit will be of very little concern.  They are desperate for business - you pay them every month for something you are likely to never use, but are legally obligated to have.  Best business model since cigarettes.  Again, if your credit still has a pulse (and i'm still not convinced that car insurance companies even check) you will get insurance.

A late payment, maxing out your credit cards -- can haunt you for years

Get out... no it can't.  Don't believe the idiots.  If you don't have a late payment on some payments, it doesn't even end up on your credit score for any other creditor to know that you have had that line of credit.  The goal of this little tutorial is to build/improve your credit.  Occasionally i purposely pay something late.  It looks better on your credit report, shows that if you do fuckup, you will fix it.  Plus, it shows that the little loans for guitars and stuff even exist, and you have more credit than just a cell phone.

As for maxing out your card... balance transfer.  You can always transfer your balance to another credit card company for a lower interest rate.  They want your business more than you need their money, trust me.  Now, if your balance gets out of hand, and you find you can't pay it, when they call you, you can always tell them some crap that makes them make you an offer - bam, then they cut your interest down anyways - then you can still do the balance transfer and save more. I HAVE DONE IT BEFORE... and you probably know someone who has done this too.

Now... keep this things in mind, and then go read this article, because every other tip they give you is true. It's one of those MSN money articles for beginners.

The ones i speak of earlier are bullshit scare tactics from the propaganda machines of major financial institutions.  Make your credit work for you, don't work for it.  Credit is the modern day slavery, if you lack the knowledge.

In another article, i will identify some ways to manipulate credit to your advantage if you are an artist - there's a bunch of cool tricks for us.

More to come... tune in again soon.