You probably made a few New Year’s resolutions in
January. Maybe these resolutions included setting financial goals like saving
money or paying down debt. Unfortunately, most resolutions fail in the first
half of January.
Whatever your resolution you made, we understand
it’s important. And even if you stopped working on your goals halfway through
January, we know your credit is important. We’ve identified the most common
financial and credit New Year’s Resolutions. This article will help you evaluate
to see how you’ve been doing at keeping your resolutions and how you can get
back on track if you haven’t.
Resolution #1: Reviewing
Your Credit Reports
One way to keep track of your credit is to review
your credit reports. You can get a credit
report from the three credit major bureaus- Experian, Equifax, and Transunion-for free, once each year.
After you receive your credit reports, review them to
make sure the information is correct. If anything looks incorrect, there’s a
chance it’s impacting your credit score. It’s a good idea to challenge any
information you think is incorrect. This can help you get your credit score to improve.
Resolution #2: Making
Payments on Time
One of the most important things that you can do for
both your credit and your finances is to make payments on time each month –
whether they’re reported to the credit bureaus or not. Making payments late can
lower your credit score or lead to penalty fees that cost you more money.
Not in the habit of making payments on time? You
can automate most of your payments so you don’t have to worry about them. Or,
you can set up calendar reminders to tell you to pay your bills. It’s never too
late to start paying your bills on time.
Resolution #3: Reducing
Your Spending and Paying Off Debt
Having credit cards with high balances will lower
your credit score. Why is this? Credit utilization accounts for approximately 30
percent of your credit score, meaning that if you have credit cards
with high balances on them, it will negatively impact your credit score.
Even when you’re making the minimum payment on your
credit cards, your score won’t improve by much. If you want to improve your credit score, you can
set a financial resolution to decrease your spending on your credit cards. As
you decrease your spending, start paying down debt and follow through with
strict budgeting. Take into account your expenses and retirement savings you
set aside each month and see where you can pull money from to go toward paying
down your debt without disrupting your other payments.
If you’re not sure where you should start, make a
list of your outstanding debt. Start by listing your debts from the lowest
amounts to the highest and begin by paying off the lowest amount first and work
your way up to the highest. In doing so, you’ll see start seeing small
improvements to your credit score and may become more motivated to continue to
pay down debt. As you pay down your credit card debt, you’ll start saving money
since you won’t be paying interest anymore.
Resolution #4: Not
Opening New Accounts
Some people love applying for new credit cards. But applying for every credit card you see will eventually hurt your credit score.
If you’ve set a goal to buy a house or a car this
year, remember to take the time to shop around and research different lenders.
Also, make sure that your credit is in the best shape possible before you apply
so that you have the best chance of being approved. If you apply for multiple
credit cards before buying a home, this can hurt your chances of getting
approved. Remember to pick and choose when it comes to applying for new credit.
Resolution #5: Fixing Your Credit
If you’re struggling to fix your credit and get
your finances in order, call the credit specialists at Lexington Law Firm.
We’ve worked to help over half a million clients remove negative information
that is unfair, inaccurate, and unverifiable. Why not invest in yourself and
your future by fixing your credit? Call today for a free personalized credit consultation.