“Initiative” is the keyword this year. Whether you’re a seasoned credit repair seeker or a first-timer, improving your life is impossible without the right focus and savvy. Adopt these initiatives as you begin 2015 to strive for better credit. A better life is within reach.
- #1: Track spending. Budget, budget, budget. I can’t emphasize this enough! You wouldn’t take a foreign trip without a map, and you shouldn’t wander through the financial unknown without a plan, either. The average person avoids budgeting to downplay the truth of their financial reality. Aim higher than “average” this year by doing something extraordinary. Confront your finances with facts and learn to harness them. Use our free budgeting template to get started.
- #2: Set goals. Once your budget is set in stone, it’s time think of ways to use your resources. What are your personal goals? Professional goals? Plans for the future? Put simply, what do you want? Transform hazy expectations into a plan of action this year. Create a one-year plan with at least five goals and save them alongside your budget. The combination will help you stay on track.
- #3: Guard your information. I learned the difference between soft and hard inquiries the uncomfortable way. Credit repair requires prevention as well as action. Protect yourself this year by guarding valuable information like your Social Security Number, bank account information, salary, etc. Stop identity theft before it starts.
- #4: Audit bills. Variable expenses can demolish your savings. If you fear overcharging this year, assert your rights by asking for an audit. We talked about this process with medical bills (more on that here), but the same message applies to utilities, phone service and even banking fees. Assert yourself and save whenever possible.
- #5: Cut spending by 10 percent. Change is tough but doable in small increments. Take the challenge in 2015 by cutting your expenses by 10 percent. “10 percent?” you ask. “There’s no way I can afford that!” Think again before dismissing the opportunity. The average household wastes thousands of dollars each year on convenience purchases, overcharges, fast food and complacency-induced spending. Start small by eliminating these items from your budget list. For example, if you’re shopping for onions sold for $2.25 per pound, find a coupon app or different grocer that offers at least 10 percent off. If your utility bill was $75 last month, turn down the heat to eliminate at least $7.50 in January costs. In the end, change is about habit. Begin forming yours today.
- #6: Let others drag you down. You might be a financially responsible person, but the weight of others has kept you from achieving important goals. Whether it’s caring for a family member, cleaning up another’s financial mess or cosigning a loan, it’s time to put your own needs first. Eliminate risk this year by detaching yourself from others’ financial woes. Look for social programs to help loved ones with their troubles and begin building a wall around your finances.
- #7: Fall for a sales pitch. We’ve all been there: You’re at the checkout counter and are met with offers of bonus points and deep discounts. The only catch is you’ll need to sign up for a credit card. Credit accounts are positive and powerful when used correctly, but signing up for too many can actually damage your credit score. Practice discretion this year and review new account decisions with a professional.
- #8: Compare yourself to others. Those Joneses keep getting richer, but that doesn’t mean it’s time to copy their habits. We live in a world of opulence and overspending, two qualities that are sure to kill your credit score without caution. Avoid damage by living within your means and sticking to personal goals. If you want a change, use education, hobbies and qualifications as tools of self-improvement. Emulate success, not lifestyle.
- #9: Sign without a second opinion. Whether you’re shopping for a home or considering student loans, signing up for long-term debt will have lasting effects on your credit health. Sign up safely by consulting a credit counselor or financial planner during the process. Seeking a second opinion is always a good idea.
- #10: Live in the moment. We’re all for day-to-day happiness, but day-to-day financial planning is a “no” in 2015. As we’ve learned, credit health requires a plan, action and motivation to work. We can help, but it’s up to you to stay on track. Give yourself the change you deserve this year. It’s never too late to start over.