With the New Year just around the corner itâ€™s a great time to start thinking about what to do in 2013 to get your credit on the right track and keep it there. The Tips below will help you do just that so have a seat, grab some coffee and letâ€™s get started.
First you need to see where you are, credit wise, so that you know where you want to go in the next 12 months. Your credit report, in fact all 3 from the Big 3, will serve as your guide for this so, as soon as the Holidays end, get copies from them and review them thoroughly.
A new year means new goals for practically everything and your credit is no different.Â Do you want to pay off a large debt or pay more on your mortgage?Â Maybe you want to change the way you use your credit or wean yourself off of some bad credit habits?Â Whatever you wish to do set some goals for those tasks and youâ€™ll have a better chance of making them happen.
Since the percentage of your total income that you use to pay off debts plays a vital role in your credit score and credit rating one of your goals should be to lower your debt-to-income ratio.Â Paying down debt wherever possible will have the effect of â€˜increasingâ€™ your income and raising your credit score, both of which will help you in the coming year.
Donâ€™t rush to open any new credit accounts unless you really do need them.Â Keep in mind that every time you open a new credit account your credit score takes a small hit.Â If youâ€™re opening accounts to try and increase your score youâ€™d be best just to pay down your debts and pay off existing cards than open any new ones.
The same thing goes for closing any existing credit accounts that you have. It seems contradictory but closing a credit account, even one in which you have a zero balance, can actually lower your credit score. If youâ€™re going to be buying a house this year it is imperative that you leave any accounts that you already have open, especially if youâ€™ve had them for a number of years.Â The longer your credit history the better.
Good luck in the New Year and remember that your credit score and rating are an important part of your financial life. Treat them with respect and theyâ€™ll help you all year long and for many years to come.