Did you struggle with your credit and finances last year? It’s time to start this year off with a clean slate. Where to start? It’s not as challenging as you think. Follow these simple steps and start getting financial control back in your life.
Take a Good Look at Your Credit
The Federal Trade Commission offers steps for your to obtain a free copy of your credit report every 12 months. Head over there now and see what you’re working with. This is also where you can check for discrepancies and resolve them quickly. Your report will give you an accurate view of what’s being reported to the three bureaus: TransUnion, Equifax and Experian.
Look closely at your account or credit card balances, are they correct? If so, work on bringing those down. Late payments? To improve credit worthiness, start making them on time. Most companies will work with you on calculating a new due date if that’s been a problem.
What’s your credit rating? Work on achieving a FICO score of at least 670. The higher the number, the better chance you’ll have at getting more favorable interest rates and loan terms.
Where Is Your Money Going?
The next step is rebuilding your credit. Did you go through a devastating divorce last year? It’s time to leave the past behind and look ahead with a clean slate. Know exactly how much money is flowing in and out of your bank account.
Create an effective budget and stop over-spending on things you don’t need like pricey cable or going shopping with your BFF every weekend. Put that money into paying off debt or tuck it away into savings. Being smart about spending and paying every bill on time will help get your credit back on top.
Pay off Your Debt — Simply
To get ahead with finances, you must first pay off your debt. Make it simple by using either the debt snowball or avalanche method. Both attack your mound of debt, but by using opposite approaches: One tackles the highest amount first and the other starts with the lowest.
Saddled with medical bills or credit cards to pay off those large balances? Try to consolidate your debt. This gets everything into one affordable payment that makes it less likely to miss and quicker to pay down.
Build up Cash Flow
Whether your debt load is small or gigantic, it’s always a good time to build your wealth. This could be through getting a better job or taking on a side gig in your spare time. Find ways to bring in a few extra bucks each week. Use half of that extra cash to pay off debt and the other half to build a savings account for retirement.
Don’t Accumulate New Credit
Don’t give in to the temptation to apply for more credit cards while you’re still paying off the ones you have. Instead, look at ways to minimize or negotiate payments with your existing lines of credit. This will help you reach a good financial place sooner rather than later.
It might take some time, but you can rebuild your credit. It’s never too late to reclaim your life, and this starts with a healthy financial portfolio. Make small steps now to open the doors to more financial freedom in the future.
~Here’s to Your Success!
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