8 Tips to Improve Your Credit Score in the New Year

Having healthy credit is important for many reasons. Poor credit history can hurt you when renting an apartment, buying a home, purchasing a car, and even applying for jobs.

8 Tips to Improve Your Credit Score in the New Year | First Choice Power

If polishing up your credit score is one of your primary New Year’s Resolutions, we want to help. It all starts by making the choice to buckle down and then taking one step at a time to complete the slow – but necessary! – process of improving your rating. Use these tips with a bit of diligence and focus to help achieve a healthy credit score before the year’s end.

1) Obtain Your Credit Report

8 Tips to Improve Your Credit Score in the New Year | First Choice Power

Rather than guessing about your credit score, find out exactly what it is so you can determine your starting point. As part of your new budget for the new year, make a list of how much debt you have and all the creditors you owe. Too often, we simply make multiple minimum payments each month just to keep creditors from harassing us. Unfortunately, if you don’t actually track the nature of your debt, this can lead to confusion, as we don’t really know where we’re at, or what we owe.

2) Schedule On-Time Payments

Bad credit can be caused by making late payments, so the first step in improving your credit is simply paying on time. Put a reminder in your calendar – whether a digital one on your smartphone or physical one on a wall – of when your payments are due. Even better, put the date a few days before the actual due date so you don’t risk paying past midnight.

3) Eliminate Debt

8 Tips to Improve Your Credit Score in the New Year | First Choice Power
There are many causes for your debt, but what’s important is that you develop a coherent plan for reducing it.

Get out from under your debt by trying to pay off your credit cards as soon as possible – especially cards with high interest rates. If you have multiple cards, focus on the one with the highest interest rate first, and funnel as much money as possible into paying off that particular card until it’s at a zero balance.

4) Pay More Than the Minimum

To speed up debt elimination, it’s important to pay more than the minimum amount due. Seriously – anything helps. These little increases to your payments will add up over time, and as your lump sum average begins to dwindle, so too does the interest you are being charged on your balance.

5) Don’t Close Cards

8 Tips to Improve Your Credit Score in the New Year | First Choice Power
Cutting up that paid-off credit card does give you a rush of satisfaction, but don’t do it until you have more debt paid down.

The notion that closing our paid-off credit cads will help your credit score isn’t true. Keep the credit cards you have paid off, but just don’t put anything new on them until the rest of your debt is under control.

6) No More Credit

Resist temptation and don’t open any more lines of credit. More credit means the potential for more debt, missing payments, and other factors that can lead to a worse credit score.

7) Carry Cash

8 Tips to Improve Your Credit Score in the New Year | First Choice Power
You don’t have to be a high-roller flashing big stacks, but it’s good to have some cash on hand at all times.

Get in the habit of having cash on you to pay for small items. This reduces the temptation to slap it down on a credit card. Break the cycle of credit dependency, and your score will improve slowly.

8) Be Consistent

Your low credit rating didn’t happen overnight, and bettering your credit score won’t happen overnight, either. Just be a responsible consumer, and stay on top of your payments by making them on time, and paying more than the minimum due. Slowly and steadily, you will raise your score. Breathe and stay committed. You’ll get there.

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Born in Australia, Ebony has been in Texas long enough to consider herself a Texan-Aussie. Ebony has been writing for magazines, newspapers, and blogs, for more than 10 years. When she's not writing she's building quilts, growing her own food, or camping with her family somewhere far from the sounds of the city.