The beginning of 2011 offers many of us the opportunity to start fresh; whether it’s improving our eating habits, starting a new venture or just de-cluttering the garage, the beginning of a new year promises us that the past is just that – the past.
Now is the perfect opportunity to take a few steps to improve your family’s credit situation. Sound scary or daunting? It doesn’t have to be, promise. Here are some simple ways for you to get your credit score rolling in a positive direction.
Assess the situation
You can’t fix or improve upon what you don’t know. If you haven’t pulled your credit report within the last year it’s time to do so now. Fortunately, the credit bureaus are required by law to provide you with a free credit report every year (www.experian.com, www.transunion.com, www.equifax.com). Each bureau reports your information differently, so it’s important to get one from all three.
Once you have your report in hand, look carefully to see if there is any incorrect information. If there is, contact the bureaus immediately requesting the information be removed or corrected. You’d be surprised — I’ve found other social security numbers on my report before, so you never know.
Don’t be tardy to the party
Delinquent payments and collections can have a substantial negative impact on your credit score. So pay your bills on time, and if you are in financial distress contact your creditors or see a legitimate credit counselor. The longer you pay your bills on time, the better your credit score.
Pay it down
A third of your score is derived from the amounts owed on your account balances (www.myfico.com). There is a ratio taken of the proportion of your credit lines used. In other words, you want the most credit available with the least amount of balances owed as possible (especially on revolving debt, like credit cards).
Keep things active
The old cliché time heals all wounds is true when it comes to your credit score too, but only if you’re acquiring new positive payment history. So regardless of whether you’ve had a bankruptcy, foreclosure or just some minor slip-ups it’s important to attain positive credit as soon as possible.
Facing your credit demons can be an intimidating task, but in the long run, you’re family will be in a better financial position.
What does your family do to keep your credit history looking good?