Financial Inclusion means access to affordable credit on the path to financial recovery.
Whether or not you’ve heard the term “financial inclusion” before, it can be difficult to understand what exactly that means. Understanding financial inclusion and how it can define you is an important factor when it comes time to budget for a big purchase like a home or when life throws you a curve-ball and you need some financial assistance.
Let’s break it down for you…
Financial inclusion means:
- Access to affordable credit
Typically, the first place most people apply for a loan is at one of the major banks. Whether you are looking for a line of credit, mortgage or credit card, the best interest rates are going to be found through a bank. Unfortunately, if your credit score is less than 700, you will likely find yourself having to shop for loans elsewhere.
Being financially secure enough to manage money
Managing your finances on a day-to-day basis is a key factor in maintaining your access to affordable credit and remaining in a position of “financial inclusion.” When you are able to manage the money you have and live within your means, it’s unlikely that you will find yourself in a position of needing to look for alternative methods of borrowing. That being said, emergencies happen to everyone and when the unforeseen occurs it can impact our finances and increase our stress.
Planning for the unexpected and having the means to deal with it
Life is full of changes and unexpected circumstances happen to everyone. Job loss, medical expenses, and home repairs are just a few examples of the major costs that occur throughout your life. However, it is having the financial ability to weather these storms that determines whether or not you are included in the mainstream financial marketplace. For example, those with disposable income, such as emergency savings (a “rainy” day fund) are in a better position to manage unexpected costs and still remain in good financial standing to access credit quickly and easily if necessary.
If you find yourself in a position where you do not meet the criteria above, there are a variety of options for you to find the money you need. Unfortunately, some of those options will end up putting your finances or credit score into an even deeper hole.