You may have promised yourself at the start of the year to get out of debt. Along with your plan to get out of debt, have you thought about setting a goal to improve your credit? Consider adding these credit resolutions to your money resolutions this year to help you get out of debt and stay out of debt faster.
Get your report for free. At least once a year, you should check your credit report to make sure there are no mistakes or, even worse, fraud. Also, if you're planning on making a big purchase soon, like a new car or house, you should check your credit report well before the date of the purchase to make sure there's nothing on there that will keep you from getting a loan. At www.annualcreditreport.com, you can get a free copy of your credit report.
Find out more about your credit. The better chance you have of building a good credit history, the more you know about credit and credit scores. Find out how borrowing money affects your credit score, as well as how paying late, not paying at all, or closing accounts can affect your score.
Don't be late with your bills. Your payment history, which includes whether or not you pay your bills on time, is the biggest factor in figuring out your credit score, so it's important to pay all of your bills on time, not just your credit card bills.
Cut your rate of interest. Start by calling your credit card companies and asking them to lower your current interest rate. Tell them you have been offered to move your balance to a card with a lower interest rate. Most likely, they will lower your rate so they don't lose you as a customer. If you're not a customer, they can't make money off of you. If that doesn't work, you can move your high-interest balances to credit cards with lower interest rates, but don't do this too often or it could hurt your credit score.
Stop paying late or overdraft fees. Set a "date" with yourself every week to pay your bills. Or, even better, set up automatic payments so you always pay your credit cards on time. Setting up your credit card accounts so that you can pay online is another way to avoid late fees. Some credit cards let you pay on the due date, so you don't have to worry about paying late (others charge to make same-day payments). Fees for being late or going overdrawn can add up quickly, and it's even worse when you have to pay interest on those late fees. What a way to make things worse!
Lastly, start a fund for emergencies. Even though this doesn't seem like something that would affect your credit score directly, it can have a big effect on how you use credit. If you have an emergency fund, you are less likely to use credit cards for things like car repairs, medical bills, etc. that come up out of the blue. If your credit card company suddenly raises your interest rate, you also have options if you have an emergency fund.
