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5 Things You Can Do to Rebuild Your Credit in 2014

Whether you’re making your New Year’s resolution a better credit score, or you simply want to improve your credit, there are fortunately many ways you can do so. While it may take a little self-discipline and focus, there is no reason whatsoever you cannot get your credit score back to where it should be. Having good credit is important for many reasons. You are more likely to be approved for certain types of loans, and cars, apartments, and houses are much more easily attainable. Having a good credit score also means the absence of the stress and anxiety that comes along with the burden of financial issues and debt.

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If you are looking to rebuild your credit for the New Year, now is the time to start. Following these five easy steps can help you do so:

Evaluate your finances— The very first thing you should do in order to start improving your credit is to obviously evaluate all aspects of your finances. Look at your bank accounts, credit and debit card statements, all sources of income, and monthly spending patterns in order to gain a good understanding of all deficits you may have. If you are unsure of your spending patterns, start taking note so you can familiarize yourself with where exactly all your money is going every month. If you aren’t already aware, you may be surprised with how much money you spend eating and going out, and other unnecessary items and services. Keeping close track of your finances will help you cut back on spending if you need to.

Make a budget— After conducting a thorough examination of your financial standing, making a budget can be possible. Budgets are extremely helpful for monitoring monthly spending as well as saving money. You should create a realistic budget that works for you, and stick to it. If you can do that, you should almost never run into financial issues because all money usage is predetermined so that everything you spend can fit into your budget. It may take some experimenting and a little adjusting, but with time you will be able to find the perfect budget that works for you and your finances.

Make all bill payments on time— Any bills you may have need to be paid on time, especially if you’ve made a habit of making late payments. While a couple late payments may not cause too much trouble besides annoying late fees, multiple in a row displays financial difficulty, and may take a toll on your credit score. To avoid this, just be sure you are making your payments on the specified date. If you find that you don’t have enough money to pay off all of your bills at the end of the month, your budget needs to be adjusted to fix this deficit. Current obligations and bills should always come first, even if it requires you to cut out some of your accustomed extravagances.

Lower credit card balances— More than one credit card as well as high balances on cards, even just one card, can be detrimental to your credit score. Try to pay in cash as much as you can so that you are not using your credit cards as much. In order to score well on a credit check, only about 10-20% of the available credit on a card should be used at any one time. Avoid maxing out cards at all costs. Seek alternatives when you need extra money, like a car title loan from TitleMax. You will have to keep close watch of what you’re using your credit card for, and it’s a good idea to only use it in cases of emergency, or when it’s unavoidable. Credit cards can be helpful for creating good credit as long as you are making card payments on time, and you can handle interest rates.

Pay off outstanding debt— If you’re deep in debt but still charging money to credit cards and spending freely, you’re definitely just digging yourself into a deeper hole. You need to strap down and get a hold on your spending, or your financial status will only keep declining. While it may be difficult at first, cutting out unnecessary superfluities, like super expensive phone plans, gym and club memberships, and vacations, will benefit you in the long run. All money saved from cutting out these luxuries can be directed toward paying off debt instead. After that debt is paid off, direct the money towards a savings account and soon enough, you can have a pretty large sum of money saved up.