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Quickly Spring Clean Your Finances
Spring, as a season, is transformative and highly optimistic. It’s all about renewal and second chances.
So it’s the perfect time to consider getting your finances in shape! Particularly if you’ve been burying your head in the sand, afraid of what might be lurking in your financial history.
Indeed, checking your credit history can feel a bit like getting a medical check-up. It’s not something you particularly look forward to, but it’s better to know where things stand. Because then you are in the empowered position to deal with the situation! Nip your issues in the bud before they snowball into something huge.
While it might not sound like the most pleasant task, checking your credit report is the first and most important step. Only when you’ve reviewed your credit and know where you stand can you look at all the options available to you. The good news is that with so many people in debt today and with so many people struggling with credit issues, there are a lot more tool and options available now than there once were. You can take advantage of available methodologies like the debt snowball worksheet as posited by financial guru Dave Ramsey.
So, let’s get started with our quick financial Spring Clean. It’s just three simple and painless steps!
1. FIND OUT WHERE YOU ARE: CHECK YOUR CREDIT REPORT
The first step is to check your credit report.
The first thing is to check on your credit report is for errors. Some credit reports contain many errors due to issues such as identity fraud. Be sure to check for incorrect late payments, missed payments, or collections notices listed for any accounts. Then dispute any errors you find with the credit bureau, who can be surprisingly helpful in getting things rectified.
And it’s ok if your score is less than desirable. At least you’ll know and you can do something about it, like taking action to repair your credit score.
2. DAMAGE MANAGEMENT: GET BACK ON TRACK
If you have legitimate late or missed payments, it won’t do any good to worry yourself over it now. The damage is already done – all you have control over is the current moment which will directly affect what happens next. And the best thing you can do moving forward is to ensure your bills are paid on time.
It can feel overwhelming, once you’ve fallen behind to get back on track. So this is when many people avoid or ignore the issue. They let things spiral out of control rather than addressing them. But think of a car with no driver; the longer that car is left to drive without direction, the greater the likelihood of a horrific disaster.
The trick is to get back on track by getting up to date with your bills, even if that involves looking into something like debt consolidation, so that no further damage is done to your credit file. This can buy you a little room to breathe and get back on top of things.
3. BUILD UP YOUR SCORE: USE CREDIT CARDS
There are many myths around credit cards, but one of the best ways to build up your credit score is to use your credit card often and pay off the balance in full each month.
Financial organizations want to feel assured that you can manage your finances and repay credit on time. So using credit cards and paying them off each month is a good way to build a reliable track record of making timely debt payments.
If you were to simply cut up all your cards and refuse to use credit, you wouldn’t get a chance to show that you can be trusted to use credit wisely and repay debts. Lenders would see you as an unknown quantity, which, from a bank’s perspective, is a major risk! The more you use your available credit, and pay it off on-time each month the higher your score will be.
Good luck with your spring cleaning and credit repair!
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