4 Tips for Spring Cleaning Your Finances
Here are four tips for spring cleaning your credit:
1. De-clutter your wallet
Do you carry credit cards that you never use? Credit cards sitting in your wallet may tempt you to overspend, so store them in a safe place rather than carry them with you. Don’t, however, automatically assume you should just cancel a card you don’t use. Closing an account affects your ratio of credit available to credit used – a factor that helps determine your credit score. Before you make a credit move of any kind, you can use tools such as the freecreditscore.com Score Planner, which is available to everyone, to better understand how your action might affect your credit.
2. Automate your billing
Late or missed payments can pull down your credit score. Clean up this part of your credit by automating bill payment. Many creditors now allow you to sign up for online billing that will not only deliver your monthly statement to your inbox, but alert you when a bill is coming due or becomes past due. Most also offer automatic payment options that allow you to choose a date on which to have payments automatically withdrawn from your bank account every month. Automation is a great way to ensure you never miss a scheduled payment.
3. Review your credit report and score
Check your credit report for errors and take steps to correct any that you find. If your score is lower than you would like, you can then start to take steps to improve your credit score. Learn more in our blog post 9 Fast Fixes For Your Credit Score.
4. Pay down debt
Debt is costly. By reducing your debt, you’ll lower the amount of money you waste paying interest. There are two schools of thought for paying down debt, and either can work for you. There are different strategies for paying down debt. One philosophy says to get rid of the highest interest debt first since that costs you the most money every month. On the other hand, choosing to focus your pay-off efforts on the smallest amount of debt – say that credit card that you owe $1,000 on – can help you reduce debt faster. Plus, you’ll get the sense of accomplishment that comes with paying off a debt. Decide which route works best for you, and create a payment plan as part of spring cleaning your credit. Figure out what works best for you and manage your credit card debt as an ongoing project.
What have you done to spring clean your finaces? How have you gotten your credit in check? What challenges have you met along the way? Leave your feedback in Comments, on Facebook or Twitter and don’t forget to subscribe to the Patrick Parker Realty monthly eNewsletter for more tips, guides and articles like this delivered straight to your inbox.