To have extra money to spend, takes a simple plan of action which begins with getting organized and staying on-track. The goal is to achieve a credit score of 750 points and higher. 750 is the minimum score you will need to have some of the finer things in life so organizing your financial life is critical if you want to boost your credit score.
1. Locate and organize your paperwork.
Gather all your financial records and organize them into folders by category. Have one folder for each bill you pay each month, quarterly, yearly, etc. This includes all utilities, mortgage or rent, gasoline, water and sewer, electric, cell-phone, well...you get the idea. Also have a folder for tax records, too.
When bills come, pay them as soon as possible. Don't wait until the last minute. As you pay each bill, mark the receipt with the date you mailed it and the check number and place it in the file folder it goes to.
2. Make up tracking sheets.
We have a three ring binder with sheets for each month that list all our bills and when they are normally due to be paid. When the bill comes we fill in the amount on the sheet and then mark it when it's paid. At the top of each column is the date we have money coming in (pay checks).
This will keep you on-track because you can see, at a glance, which bills are coming due in relation to when you have money (pay checks) to pay them. Then, every three months you should pay to check your credit score. Gradually you should see an improvement as you begin paying your bills weeks before they are actually due.
3. Small credit errors can lead to major credit problems.
You would be surprised to learn that many credit mistakes can be avoided. A simple mistake when giving your Social Security number or using a different version of your legal name can really foul things up. Just one digit off in your Social Security number makes it look like you are someone else. Using your name with a middle initial some of the time and leaving it out at other times makes you look like two different people as well.
4. A few points in your credit scores can have an expensive impact.
Most people are not aware that just a few points, more or less, on a credit score can mean the difference between a creditor offering you the interest rate normally reserved for the best borrowers and a more costly interest rate for customers with lower credit scores. This happens all the time and most borrowers have no idea when it happens to them.
Just two interest rate points can cost thousands of dollars more over the life of a loan, especially for large purchases. By the same token, cutting your interest rate by a couple of points will save you thousands of dollars. You can see why it's so important to improve your credit score by every percentage point possible. The better your score, the better the interest rates you will be offered, the more money you'll have for the finer things in life.
5. Take focused action to make your credit history more attractive to lenders.
Go through all of your credit reports from the three major bureaus. Make a list of errors and mistakes, unused accounts you need to close, high-interest accounts you need to pay down, creditors you need to contact, and anything else that you can correct.
Work on your list daily. Be determined. Soon you will see progress and your credit score will begin to rise as you clean up each item. You will feel good about yourself, believe me.
6. Put your bill paying on auto-pilot.
We live in an age of electronic banking and bill paying. It's getting so we don't even need to write checks to buy things and pay bills. For example, you can have direct deposit of your paycheck and couple it with paying your bills automatically out of your checking account. You can even pay bills with your credit card electronically and automatically each month. You can even have emails or text messages sent to you to remind you that bills are due.
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