Often, many people don’t stick to resolutions because they have chosen ones that are incredibly difficult to attain, such as extreme weight loss or winning the lottery. But one of the most common resolutions – and one resolution that you really can attain – is to improve your financial situation. Improving your credit score can make you a more powerful consumer, because you will have access to lower interest rates and more purchasing power.
Take our multi-pronged approach to improving your finances in 2013 with a better credit score.
Step 1 – Be happy with what you have
First, begin by putting an end to the never-ending inquiries on your report. Stop applying for miscellaneous credit cards, mortgage financing and car loans until you have done enough research to make sure you are ready for that kind of purchase. Apply for credit only when it is needed. It is easy to give a car dealer permission to take a look at your credit when he or she is promising a sweet deal on a new ride. Remember that every time you allow a company to check your credit, your credit score is lowered, and these inquiries make up 10 percent of your overall credit score.
Step 2 – Skip the morning latte
If you are making only the minimum payments on your credit card debt, or worse, if you have missed payments, your credit score is going to head in the wrong direction. Make a commitment to making every payment on time, and pay more than the minimum payment. Even if you can only pay $5 more (about the price of a latte), it can make a difference, both in how much you’ll pay in interest to pay off the card and on your credit score.
Step 3 – Get Balanced
One of the most useful things you can do is employ a budget so that you are not relying on credit to meet your monthly obligations. Stick to your budget. If you use your card, pay it off. Using your card can be good for your credit score if you pay off what you spend.
Step 4 – Alleviate Old Problems
Simply, clean up your credit. Request a copy of your credit reports and carefully review them for errors. Many mistakes are often made on credit reports, so check your credit reports at least once a year for mistakes and dispute errors you find.
Step 5 – Sit Back and Reap the Rewards of another Year PastShould old bills be forgot and hurt your credit score no more Should past due bills and late fees clear from days of long ago!
With another year past comes another year of credit history for you, which is wonderful news. Credit history makes up 35 percent of your total credit score, so the longer you have your accounts, the more they work for you.
Go ahead and eat the cheesecake. Let this year’s resolutions be all about making yourself a more powerful consumer.