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We’re in the fourth quarter and a few months away from a new year! Imagine all of the cool things you can do in 2018 if you fix your credit… Cool things like buying a Lambo! (Okay, maybe not.) The question you may be asking is — how can I go about improving my credit? Let’s talk about it.
Here are a few steps to take:
Step 1: Find Out Where You Stand
What’s on your credit report right now? What is your credit score? Where do you want it to be next month? Next year? Find out where you are now and write all of these plans down. You can get your free credit score and reports from sites like Credit Sesame. Some banks and credit card companies offer credit resources as well. Do some digging!
Step 2: Start Acting
Commit to making a change. You’ve probably set resolutions before that you end up completely forgetting by the time the end of the year rolls around. Make it your goal to start improving your credit and come up with a plan.
There are several steps you can take to start improving your credit this year:
- Focus on your present payments. Your payments are the most weighted factor of your credit report. Late payments impact you the most. Set up payment reminders or automatic payments so you meet all of your due dates.
- Ask creditors to remove late payments. If you’ve been presently making on-time payments, your creditor may be willing to remove some past late payments for you. Send a letter requesting removal and get any agreement in writing.
- Reduce your credit utilization. Credit utilization is how much of your credit card balances you’re using. Having a high credit card balance can be a sign you’re struggling financially which lowers your score. Pay off debt or request a credit line increase to improve your credit utilization.
- Work with a credit repair company. If you need help along the way, you can choose to work with a credit repair company. Credit repair companies work on your behalf to improve your credit. Need assistance? Lexington Law is a company, for example, that offers a credit repair service. You can check out Lexington Law reviews here.
Step 3: Decide Why You’re Improving Your Credit
Are you looking to buy a home soon? Maybe you want to lower your interest rates on your car or other loans. It takes a better credit score to do these things. Deciding why you want to improve your credit will help you stay focused. After all, your credit score is just a random three-digit number. You need to tie in a “why” or reason for working on it to stay motivated. The “why” will be your guiding light.
Step 4: Keep Track of Your Progress
With anything, from paying off debt to saving money for retirement, it’s important to keep track of your progress. This is important because you’ll start to learn what actions improve your credit score and what actions lower it. If you know what improves it, you can keep following that same course of action. A credit monitoring site can help you track progress for free.
Step 5: Don’t Derail Your Success
Life happens. However, don’t sabotage yourself, and your finances, by making not-so-great money moves with your credit. If you have to take on more debt or do something that makes your score dip a bit, don’t give up entirely. It’s a process!
At the end of the day, starting now vs. later is the best way to start improving your credit score. Don’t keep waiting and putting it off. It’s unlikely your credit score will improve overnight. However, committing to the process and being consistent can make your score do amazing things!
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