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Getting Back to Basics – New Year’s Credit Rebuilding Resolutions

credit rebuilding smThe new year is just days away. Have you considered a credit rebuilding resolution?

New Year’s resolutions can get a bad rap at times. We read a lot in the news about how they are difficult to stick with and how most people abandon theirs by the second week of February. Why not make 2019 different?

The key to building goals that stick is to make them SMART — specific, measurable, attainable, relevant, and timely.

With that in mind here are five New Year’s resolution ideas for credit rebuilding you might consider in 2019:

  1. The problem: you take out loans that don’t help your credit score.

The resolution: Stay away from loans that don’t report to the credit agency.

One of the best ways to rebuild credit is by choosing lenders that report to your credit agency and then using good repayment habits (paying on time and in full every time).

But many people with bruised credit opt for loans that do nothing for their credit — like payday loans. Not only are these expensive, but they also do not help your credit even if you pay them off on time.

Make it SMART:

S – Be specific about what sources you will and won’t consider for lending opportunities.

M – Get a calendar and put an X through every day you make a smart credit decision.

A – Think through your credit habits and what has prompted you to go for these types of loans in the past. Make a plan to deal with tempting scenarios.

R – Obtain a free copy of your credit report at the beginning of the year and another at the beginning of 2020.

T – Identify the time frame. “I will not apply for loans that do not report to the credit agency between January 1, 2019 and December 31, 2019.”

  1. The problem: you are always going over your credit card limit or can never afford to pay your bills in full.

The resolution: apply for a secured credit card.

A secured credit card is a good way to rebuild credit. It acts like a debit card — you can only spend the amount of money you put into the account — and it is tied to collateral.

Make it SMART:

S – Research and identify what secured credit card you will apply for.

M – On your calendar, mark down every due date and how much money you will set aside for the month.

A – Set a secured credit card limit that you know you will be able to pay back each month.

R – Use your secured credit card instead of unsecured payment options.

T – Establish the timeframe that you will use your secured credit card in and when you will pay off the bill (on the first of the month, after every purchase, etc.).

  1. The problem: you keep forgetting to pay your bills on time.

The resolution: use tricks to pay bills on time, every time.

Make it SMART:

S – Specify exactly what bills you have to pay and when they are due.

M – Mark the due dates on a calendar and put reminders on your phone.

A – Keep a separate bank account for paying your bills so you will always have funds available.

R – Set up automatic payments.

T – Start reminding yourself at least a week before bills are due.

  1. The problem: you are carrying a lot of debt.

The resolution: make a plan to pay it off.

Having too much debt can harm your credit score. To start rebuilding credit, you will need to deal with what you owe. This is a popular resolution, but for various reasons people find it hard to stick with. Try these changes to erase your debt once and for all.

Make it SMART:

S – Figure out exactly how much you owe, where you owe it to, and what debts have the highest interest rates.

M – Schedule out what payment you will need to make every month to pay down this debt.

A – Start with the highest-interest debt and work down the list from there.

R – Commit to making debt payments as frequently as possible — every week, or even every day. This can help keep your budget in check.

T – Determine the dates that you want to have the debt paid off by.

  1. The problem: you have been trying to rebuild credit on your own with little success.

The resolution: consult a credit counsellor.

Sometimes asking for help is the hardest thing to do, but it can get you to your destination much faster and keep you on track with your goals.

A credit counsellor or financial advisor can help you make a credit rebuilding plan, plus you’ll have an ally.

Make it SMART:

S – Decide what financial counsellor (or counsellors) you will contact

M – Decide what questions you will ask when you contact.

A – Tell a trusted friend or loved one that you are doing this. Having accountability can make you more likely to stick to a goal.

R – Consider what you are hoping to get out of it and honestly assess what has held you back so far.

T – Schedule the time and date that you will get in contact.

At Prudent Financial, we can help turn your credit rebuilding New Year’s resolutions into reality. We will help you develop an actionable plan, so you will know exactly what to do and when.

Contact us today for a free consultation. Call 1-888-852-7647 or visit www.prudentfinancial.net.

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