New year new…credit score? I certainly hope so!
Now is a great time to start working on fixing blemishes on your credit if you have any. I didn’t have anyone sit me down and talk to me about what things affected my score, what a good/bad score was, how to increase my score, etc. So I got my first credit card at 18 and handled it very irresponsibly. I learned the hard way how having a bad score
can WILL hang a dark cloud over your ability to prosper in life. Fortunately I started straightening up my act and making better financial decisions.
Here’s what I’ve learned while improving my credit score…
- Don’t cosign for anyone. Ever. Seriously.
- Pay all bills on time or early.
- Always pay more than you owe each month whenever you can.
- Get your free credit report from all 3 credit bureaus every year.
- Don’t drag your feet on filing your taxes. Lawd this can be a separate blog post all on its own. For now, just remember that this can help reduce your chances of fraud. If you’d like more information on this, let me know in the comments!
- Keep in mind your debt to income ratio. You’ll want to keep this percentage as low as possible. Don’t know what yours is? I’ve got you covered! Click here for a calculator. You’re welcome <3
- Settle anything in collections. I once had a $200 bill on my credit for some stupid crutches that I got after a car accident and never even used. Something that small counted against me! Just take care of it. Even if you can’t pay it all at once – work towards it.
- Keep living expenses low and use the money you save each month to pay something off. Very recently my internet provider wanted to raise my monthly payment unless I got a bundle with cable (I haven’t had cable for years). Honey I hopped on that phone so quick, you hear me?! Fortunately, they made some changes to my account and kept me as a customer. That extra $30 a month they tried to charge me will go to something better, like my credit card!
- Don’t ignore issues. Fixing issues on your credit can be a total buzzkill. Push through and do it anyhow! It totally pays off.
- Consider insurance if it’s offered. If you have a credit card they may offer Payment Protection Insurance. This could be activated if you lose your job, become disabled, suffer a serious illness or die. This isn’t free. There are a lot of specifics with this so contact your credit card company and find out what their terms are to see if this would be a good option for you.
- Remember annual fees. If you have any credit cards or memberships with annual fees or dues, put them on your calendar now. These things are easy to forget. Don’t let something so small mess up your score.
- Budget budget budget. I openly admit that this isn’t my strongest point! I’m good with my money but I don’t set strict budgets. As your score goes up you’ll be able to acquire more things. But being approved doesn’t automatically mean that you can afford it. Choose wisely…
Do you have any questions or helpful advice about improving credit scores?
Until next time…