Have you been thinking about what you’d like to change for the New Year? Most New Year's resolutions involve improving health or getting rid of a bad habit. Don't forget about improving your financial health and your bad credit habits in the new year. As you resolve to make some changes this year, add one or more of these credit/debt New Year’s resolutions to your list.
Get your free credit reportSince each of the three credit bureaus is required to give you a free credit report each year, there's no reason you shouldn't be checking it. Monitoring your credit report helps you detect identity thefts, ensure creditors are reporting your information correctly, and enables you to take action on credit/debt problems before they get worse.
Clean up your credit reportDon't take for granted that the information contained in your credit report will be accurate. Mistakes happen all the time. It;s up to you to correct those mistakes. Disputing credit report information is free and can often be done online when you check your credit report.
Get out of debtIf you don't have a detailed plan for getting out of debt, you can expect to carry the debt for the rest of your life. Once you make the decision to pay off your debt, you can begin making a plan. Even if your plan spans ten, fifteen years or more, it's better than not having a plan at all.
Repair your creditNeed to fix bad credit? What are you waiting for? The New Year is as good a time as any to start repairing your credit. First, figure out what's causing your bad credit. Then, plan a solution for each of those things. Put your plan into action and you’ll be on your way to better credit.
Use credit wiselyHave you been using credit in a way that encourages debt? Changing those spending habits won't be so hard to do. At first, it will take conscious effort on your part. After making good credit decisions for a few weeks, you'll find that good spending habits start to come naturally.
Improve your credit scoreYour credit score influences whether or not you get approved for new credit cards and loans. It also affects the interest rate you pay. Lower credit scores risk denied applications or high interest rates. Improving your credit score improves your ability to get good credit card and loan terms.
Learn more about creditMany people learn about credit by making mistakes. That wouldn't be such a bad way to learn if credit mistakes weren't so costly. Spend some time this year learning more about credit and understanding the process. You'll be surprised at how information can protect you from costly credit mistakes.
Start an emergency fundWhen you have an emergency fund, you don't have to resort to credit or loans when a financial emergency arises. Building an emergency fund can take less time than paying off a credit card used to cover an emergency expense.
Pay less interestEssentially, interest is the cost of having credit. The money you pay in interest pads your creditors' pockets when it could be padding your own. You can pay less in interest by negotiating lower interest rates or paying your balances off sooner (or both). Transferring balances to a zero percent interest rate balance transfer credit card can also temporarily reduce your interest payments.
Stop paying late feesPaying late fees is another unnecessary expense that goes to your creditors. Not only do late payments result in late fees, you might also see a spike in your interest rate and a drop in your credit score. These negative results can be avoided by paying your credit card bills on time.
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