If you’re ever going to get ahead, get a great interest rate on a loan, or even a job, you’re going to have to hoarding cleanup credit and rebuild your score. The first thing you need to do is come up with a plan. The process of rebuilding credit is a simple process, but may not be so east. It’s going to take some time and a lot of concentrated effort. However, in the end, a better credit score can be achieved and make you life better.
Start to Cleanup Credit: Admitting There’s a Problem
It’s never easy to talk about our problems, but if you have a problem with credit, now is the best time to get it out there and confess it. So how does one identify a credit problem? Well, do you find that you have more bills than money at the end of the month? Maybe you have a few too many credit accounts? Having trouble making even the monthly minimum credit payment on your credit cards? If these are some of the problems you are experiencing right now, you may have a credit problem and it’s time to change things.
Save Money Every Month, Stop Using Credit Cards
OK, now that you have admitted there is a problem, it’s time to develop some new habits. First habit to break is using your credit card for every little thing you buy. Do you buy lunch at Jack-in-the-Box® with a credit card? Buying a fancy coffee every morning at that over-priced coffee house? Stop doing that. Get in the habit of carrying and using cash for all expenses. Never use a credit card unless it is an absolute necessity. Keeping cash in your pocket and paying with cash will give you a better sense of how much you’re actually spending. Along with paying cash for everything, start keeping a detailed record of all expenses.
Cleanup Credit by Getting All Credit Cards Paid Off
I know it sounds like a really stupid-simple thing, but paying off your credit cards may be the best thing you can do to cleanup credit and get back to financial health. When you spend less and start saving money, you’ll really be surprised at how much cash begins to accumulate. Use that extra savings to put toward those credit cards. This one thing is probably going to help cleanup credit and rebuild your score more than anything else. Target the credit card with the smallest balance first.
Begin by paying all you are able on this first card each month while making minimum monthly payments on all the other cards. Be sure to make all credit payments on time each month. When the first card with the lowest balance is paid off, take the same amount used to pay the first card and add this to the minimum monthly payment on the next credit card. Now, you’re paying the minimum monthly credit payment along with the additional amount from the first card, which is now paid off. When the second card is paid off, use the amounts paid to the first and second cards to add to the minimum monthly credit payment on the third card. After a time, all the credit cards will be paid off by spending the same amount each month.