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5 New Years Resolutions to Help Improve Your Credit in 2013

November 27, 2012 by     Credit

credit-score rangeWith Christmas and the new year fast approaching I wanted to go over a few credit saving tips to help you improve your score and hopefully get financing for the home of your dreams.

 

1.Check Your Credit Report and Monitor it Online Monthly

When you check your credit score and monitor it monthly you can see what is bringing it down, what can be improved, and possible charged off accounts that could seriously hurt your credit. I recommend using something like http://www.creditkarma.com/ or http://www.freecreditreport.com/ to monitor your credit score. It has a low monthly cost and it can really keep you on track if you are looking to improve your score in order to get a loan or other financing.

2. Pay Down Your Debt and Keep Low Amounts of Revolving Debt

Having a low amount of debt and a low amount of revolving debt is important part of improving your credit. When you are highly leveraged, meaning you have a lot of debt compared to how much credit you have available, it can significantly bring down your score. Also, the more credit lines you have open the more likely you are to miss a payment on one of those lines which could hurt you more than having the credit lines open can help.

3. Learn How Your Credit Score is Calculated

Educating yourself is important to making sure 2013 brings higher credit scores! Knowing which factors are important could mean the difference in getting or not getting financing for that fancy new boat, car or home you’ve had your eye on. Learning when credit dings like missed payments or big dings like foreclosures fall off and how to legally dispute errors on your report can be a big help in improving your score. For an in depth look how your credit score is calculated check out this great article from www.myfico.com .

4. Avoid Financing Smaller Purchases

Although the temptation may be great to finance every little thing your heart desires at your neighborhood electronics or appliance store try to resist. Couple of problems can occur with financing smaller purchases like washing machines, laptops, tv’s and refrigerators. The first is that if you miss a payment 15 months in to paying off your purchase generally you are charged all of the backed interest from the previous months and moving forward, trust me I learned the hard way with a TV and $500 in backed interest. Second, ties back into revolving credit to debt ratios and missed payments, the more debt you have and more payments you have a chance to miss the lower your credit score is likely to be.

5. Pay Your Bills On Time!

This one is a no brainier and step #1 towards making your credit score sky rocket in the new year. Make your payments on time and your score will rise, make your payments on time along with all the above steps and you will achieve credit score nirvana.

Hope these new years resolution can bring you to a better score, a better you, and hopefully a new home!