Poor credit could be costing you thousands of dollars a year. If you’ve suffered from a ‘so-so’ or even poor credit score for most of your life, make a commitment to yourself to raise your credit score in 2015.
1. Face your credit history and score: Like many things in life, the first step is to admit you have a problem and face it head-on. Go to annualcreditreport.com and order a free annual credit report from each of the three major credit bureaus. This takes five minutes and you can receive your credit reports instantly, online. Get your credit score for free by signing up for a CreditKarma account. Sign-up for score change alerts so you can track your score as it grows during the year.
2. Report errors to the credit bureaus. Studies show that more than half of credit reports have errors. Most of these errors won’t affect your score, but some will. Make sure everything on your report belongs to you and that the demographic information is correct.
3. Bill-pay problems? There’s an app for that. If have a spotty history making on-time payments, there’s no excuse in 2015. Remember, on-time payments make up the largest percentage of your credit score. Now you can choose from dozens of bill-pay apps that will track your budget, send you bill-pay reminders and even pay your bills for you! It’s like having a dedicated book-keeper working 24/7 in service of your budget. Check out Bill Tracker and Check.
4. Pay down debt. Having too much debt hurts your score. How much debt do you have and how quickly can you pay it off? Divide the total by 12. Can you pay it off in a year, in monthly chunks? If not, get a free financial check-up from an NFCC nonprofit credit counseling agency. You may qualify for reduced interest rates that will help you pay down debt faster.
5. Utilize less of your available credit and keep a legacy card. Credit is a funny thing. The less you use relative to how much you have, the better your score. Try to use 30% of your available credit or less, once you have your debt under control. That card you’ve had since college you were thinking about closing? Keep it open as your ‘legacy card,’ as long as it doesn’t have an annual fee (and if it does, call and ask to have it removed). Creditors like to see a nice long credit history when they check your credit file.
Remember, no excuses! 2015 is the year to say farewell to bad credit, and hello to lower car insurance and home insurance premiums. It’s the year to say hello to lower auto and mortgage loan rates, and more money in your pocket for saving, investing and pursuing your dreams. You can do it.
In his 40-plus-year newspaper career, George Morris has written about just about everything -- Super Bowls, evangelists, World War II veterans and ordinary people with extraordinary tales. His work has received multiple honors from the Society of Professional Journalists, the Louisiana-Mississippi Associated Press and the Louisiana Press Association. He avoids debt when he can and pays it off quickly when he can't, and he's only too happy to suggest how you might do the same.
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