If you’re having some trouble maintaining your New Year’s resolution to get your credit scores under control, here are some ideas that can help you stay on track:
1. Keep a Spending Journal. Often, it’s not the big purchases that can cause problems, but instead, several small purchases that add up. Fast food, movie rentals, and other little conveniences we take for granted can quickly add up. By keeping a diary of exactly what you spend on a daily basis, you can track precisely where your money goes when you make these ‘unseen’ purchases. Once you understand your own spending habits, you’ll be better prepared to stick to your financial goals when temptation arises.
2. Create a Budget. This goes hand-in-hand with your spending journal. In order to control your spending, you have to set reasonable limits. Look at your bills and see where you can cut back, as well as areas that you may need to spend more in order to reach your goals – putting away more money into your health savings account may be useful if you are planning to have a major procedure, and want to avoid maxing out a credit card, for instance.
3. Prioritize. When you are setting goals for improving your credit, prioritize what’s most important. Getting current on everything at once may not be possible, but you can decide to get current and stay current on those cards that are charging the highest fees, for example. Once you’ve met one goal, move on to the next – credit repair is a dynamic process, and as long as you are willing to move forward, you will see positive results.
4. Make a Wish List. Don’t forget to reward yourself (within reason) as your credit scores improve. Try to think of ways to treat yourself that won’t put you back into debt. Save up for a well-deserved vacation, or treat yourself to dinner and a movie twice a month. The trick here is to find something that will motivate you, without breaking the bank.
5. Automate Your Bill Pay. If you find that you are often charged late-fees because you forget the payment due date, why not pay automatically through your bank? Most banks now offer online bill pay as well, so avoiding late fees and the damage to your credit scores can be as simple as a click of the mouse.
6. Keep Track of Your Progress. Don’t forget to check your credit report and scores to gauge your progress after several months. Everyone gets one credit report per year for free – and people in some states get 2, so check your local regulations. Make sure that companies are reporting your timely payments accurately, and don’t forget that you can dispute inaccurate information on your report. If you need help with the process, work with a reputable credit repair agency to get the job done.
The ‘trick’ to credit repair is in knowing that it is an ongoing process. As you move towards your financial goals, always be willing to incorporate ways that will make it easier for you to succeed.