Do you feel like your credit score is holding you back? Bad credit can make it difficult to get approved for a loan. It can also be the reason why your loan’s terms are less than desirable. Your financial difficulties should not hold you back from taking steps to improve your credit. Here are some tips to make positive financial habits that will make the road to credit recovery easier:

  • Use a monthly budget and track your spending

    • Take time to calculate your monthly income each month.
    • Next, add up all your expenses to get an idea of where you are financially. This helps you find ways to save any extra money or see where you can cut back on spending.
    • In order to stick to your budget, track your spending. This will help you understand exactly where your money is going. This can be done by balancing a checkbook or using a financial tracking app.
  • Pay your bills on time

    • This is one of the best ways to build your credit and establish smart financial habits.
    • If you pay your bills on time, you will be certain that none of your payments will end up in collections.
  • Reduce your non-essential expenses

    • Review your spending habits to find areas where you are overspending.
    • Once you see where you are spending more than needed, identify if these purchases are for your needs or your wants.
    • Making small adjustments to your spending will reveal how much money you will save to use to pay down your debt.
  • Start to repay past due accounts

    • After reducing your spending on non-essential expenses and sticking to your monthly budget, you will start to see extra money that can be put towards resolving any past due accounts.
  • Actively monitor your credit score and history

    • Monitoring your credit score is essential to knowing where your credit stands.
    • You are legally entitled for a free credit report from each of the three major credit bureaus (Equifax, TransUnion, and Experian) each year through Annual Credit Report.com.
    • By monitoring your report, you will see what information is negatively impacting your score. You will also be able to see any incorrect information that needs to be fixed.
    • Be sure to dispute any inaccuracies on your credit report. If you have a legitimate dispute, the credit bureau is responsible for investigating and giving you a response.
  • Use credit responsibly

    • Use them wisely! Pay more than minimum every month if you can’t afford to pay it off in full.
    • Use cash whenever possible.
    • Keep a low balance on credit cards and revolving credit.
    • Don’t open new accounts, unless it is absolutely necessary.
  • Seek professional help if necessary

    • Don’t be afraid to ask for help! If you are struggling or having any trouble making ends meet, notify your creditors.
    • Consider meeting with a credit counselor or bankruptcy attorney to help you with a game plan.
    • If you live in the Southern California area and are worried about your finances, call our office to schedule a free consultation today.