We all know no one wants to retire with debt. The best way to raise your credit score is by reducing the amount of debt you have. Start small. Here are some suggestions for restoring your credit. You can also check out Dave Ramsey and his financial strategies to resolving the mass debt issues – I recommend him.
- Use a financial program – Quicken and Mint are my personal favorites. Quicken is for personal finances only, even though they mention they create it for businesses, its functions are best for personal use. Mint is excellent to use because you have it “on the go”. You can constantly update your accounts and see them all at once. Know your numbers. That’s the key.
- If you cannot eliminate your credit debt entirely, achieve for the 30% mark. If you are using less than 30% of your credit limit, you will raise your credit score.
- Every paycheck you receive, 10% goes to savings. This doesn’t necessarily have to be savings in the bank; you can create a shoe-box fund – that way you can’t get the $4 taken away from you should you forget to put money into savings.
- If you can, put $1,000 into an Emergency Fund, or 20% of each paycheck until you are up to $1,000. Then, designate an amount you can afford for each check, possibly 10-15%.
- Don’t try to pay off the largest loans, such as student loans first. Start with the smallest one you have. Make an excel spreadsheet, or for that matter, use Quicken’s debt resolution program and list all the debts you have. Forget the total number and just focus on small numbers.
- Limit your spending habits. You most likely have everything you need. This is hard for some people. Men have a hard time when they like new cars, boats, tools, etc. But if the spending isn’t going to be revenue-producing, then don’t buy it. Women also have a hard time, some more than others. With the cost of gas and food rising, its absolutely mandatory to know the realistic budget for each department. If you feel the need to buy, sell two items. That will most likely cover 70-100% of the new items cost.
- Only think of bankruptcy as a last resort. You will not be able to do a whole lot with 7 years of bad credit.
- Use your investments from E*Trade and Scottstrade and cash out. With the unsteady economy, it is not wise to have investments. Use that entire check to pay off a loan or help pay off a loan if the funds are not enough.
- Invest in yourself before investing in others.
If you need help with credit repair, feel free to contact us with any questions you may have. Everyone has their own unique situation. Let us help you resolve your debt and possibly pay off less than what you owe.