We all want better credit ratings and better credit scores. If you can visualize yourself as debt-free or having good credit again, you can make it happen. You can start by changing your daily habits to improve your financial situation. Here are the top nine ways to improve your credit score:
💸 #1 – Know Your Credit
The first step to getting better credit is get copies of your credit reports. You can order them online from all the major credit rating agencies. This will indicate if there any outstanding problems and you can start taking steps to address them.
💸 #2 – Track Your Spending
Take a month and write down everything you buy that month. It’s a bit of work but it will be priceless when you see where your hard-earned money and good credit is going. It will help you later when you want to make a budget.
💸 #3 – Stop the Bleeding
Stop using your credit cards for your everyday expenditures. Make sure you have cash or use a debit card that takes the money directly out of your account. This way you will start to see the bottom of your debt barrel.
💸 #4 – Break Bad Habits
We got into debt because we let things slide. We didn’t pay close attention enough and the next thing we knew people were calling us looking for their money. Try and figure out where you went wrong and develop new money habits to replace the ones that got you into trouble.
💸 #5 – Get Some Help
Somehow, we think that because we’ve managed to get ourselves into this mess on our own, that we should be able to fix it on our own as well. You could, but why not talk to a financial counsellor, or seek out a credit counselling service in your community. They have helped many other people just like you.
💸 #6 – Make a Budget
This means tracking your current expenses very closely, down to the last dollar if you can. Then build it back up by adding essentials like housing, food and getting to work first. Then look at what you can postpone and what items you can buy more cheaply.
Making a budget is half of the battle. To win the credit war you have to stick to it. That means monitoring your spending on a continual basis. Know where you are with your budget at the end of every week. If you spend too much this week, you’ll have to cut back next week to meet your budget.
💸 #7 – Pay Biggest Debt
As soon as you can afford to, start making more than the minimum due on your current credit cards. That way you will not just be paying interest, you will start to see the balance go down. You can pay off that card and all your cards must faster this way.
Which credit card or debt is your biggest? That’s the one to focus on first. If you can pay off a car loan faster, that will free up money to make extra payments on your other debts or credit cards. You will pay less interest and get your credit back in order much faster too. Set a goal of being debt-free in a reasonable period of time, say two years down the road. Then make a plan to make that goal a reality.