Take Steps to Clean your Credit Report
Removing negative items from your credit report is only the first step to repairing your credit; in order to get your financial act together you will need to learn new habits!
Credit Card Habits
- Spend Cash - Studies have shown that people spend more money when they use credit cards as opposed to holding cash. Try to use cash for anything you can, this will subconsciously help you to spend less.
- Pre-Paid Credit Cards – This is the same as cash, sort of. We suggest that you try to buy your groceries and gas using a pre-paid credit card. You can budget your gas and groceries pretty easily when you see exactly what you spend on a monthly basis.
Manage Your Money
- Budget - Look at how much you bring home each month and subtract all your expenses, such as mortgage, utilities, groceries, and gas for your car. Once you know what you need to spend each month to survive you can start paying off your debt…
- Pay Down Debt - Once you decide how much money you have towards paying off your debt you need to prioritize your debts. We suggest you start with the highest interest rates first, but sometimes it is beneficial to pay off the smaller debts and have them removed from your credit reports.
Taking Control of your Future
- Monitoring your Credit - It is very important to read your credit card and bank statements every month! Making sure that there are no fraudulent charges and also look for recurring charges. Many times a recurring charge can come through automatically and then cost you in the end. It is best to try and turn these monthly fees into yearly fees which are more easily managed.
- Saving your Money - Back to the basics here. Once you have payed down your debt you can take that money put aside and start a savings account. Be smart and look for an account with great interest, if you can. About 10% of your income is a good start.
Photo Source: http://www.flickr.com/photos/erix/ / CC BY 2.0
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