DIY Investing, Financial Tips, Personal Budgeting,

Are you Effectively Managing your Credit Score?

Repairing credit scores takes time, but by following these tips on how to manage and improve your credit score, you should get closer to your goal. Making your payments on time is vital. Delinquent payments can have a tremendous impact on your credit score. Some banks will allow you to send reminders to your email or phone. You can also set up automatic payments to keep yourself on track from month to month. Making your payments in a timely fashion will also help lower the amount of debt you have, but taking steps to ensure you don't accumulate more debt than you can handle in the first place is another important step. There is an abundance of advice and assistance for people who wish to raise their credit score and lower debt. Try looking into some of the following sources for additional insight and help.

Utilize Finance Tools

Annualcreditreport.com allows you to check your credit history for free every 12 months. This website is the official website of Equifax, Experian, and TransUnion, the nation's top consumer reporting agencies. Don't be too fixated on viewing your score; too many inquiries into your history can can cause it to lower. You should also consider using tools to keep a tab on your expenses. Mint.com takes the guesswork out of tracking how much you're spending and where you're spending it. Mint.com can break down your expenditures into graph form, and help you save towards goals. The handy website is also usable across different platforms, like your smartphone or tablet. Websites like Payoff.com attempt to make debt repayment rewarding and fun by offering a social platform for setting and reaching goals. You can connect with friends and share your progress across other websites like Facebook, and Payoff.com even offers chances to win prizes. Credit counselors and consolidation programs can also give you a boost. These companies will work with you to provide a course of action to getting your finances back on track. Some counselors will even work out repayment plans on your behalf. This FTC page provides more information about choosing a credit counselor that's right for you.

Consumer Protection

Knowing your rights and options when using credit or repaying debt is one way to protect yourself from precarious financial situations. The Consumer Financial Protection Bureau (CFPB) will begin regulating 175 debt-collection firms starting January of next year. A Washington Post article clarified the goals of the CFPB: the bureau will assess whether debt collectors are compliant with requirements of federal consumer financial law, which includes providing consumers with accurate information and disclosures.

Tips From Pros

Kimberly Palmer, personal finance columnist at US News & World Report, warns a spotless credit record might be more of a hassle than one with a few blemishes on it. Some people advise to get a credit card and never use it except in emergencies. However, if your credit history too light, lenders won't know if you're reliable in paying back debts. Having active credit accounts shows you can handle credit. A man from Westlake, Ohio with an astounding credit score of 848 out of 850 enjoys luxuries but does not live beyond his means. Although he doesn't spend much time fussing over his credit score, his three basic tips are:
  1. Never charge something without having something to show for it.
  2. Never spend money without knowing when you can repay it.
  3. Pay your bills on time.
It sounds incredibly simple, but if it truly were that simple, then more people would follow this advice. If we could add anything to that list, it would be:
  1. Practice moderation. Don't make impulse purchases. It's okay to reward yourself from time to time, but when you do, make sure you're still following Tips #1, 2, and 3 above.
  2. A smart phone is a privilege, not a necessity. Save on the hefty monthly fee and buy a pre-paid phone until you can work yourself into a more comfortable financial situation.
These are just some of the ways that you can manage your credit score, raise your financial IQ, and live stress-free and debt-free. By: Chris Potter - CC BY 2.0
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