Your credit is your pathway to homeownership, increased purchasing power and can even be necessary for your workplace. By ignoring any delinquencies and letting your score lag, you’re preventing yourself from progressing in ways you may want.
And despite what you read, improving your credit may not be as hard as you think.
By taking some simple steps to change your priorities and rethink your budgeting, you can see significant improvements by the time 2019 rolls around. Your first step should be requesting a credit report from Experian, Transunion, and Equifax; the Federal Trade Commission (FTC) ensures you’re allowed one free from each bureau every year.
Ready to get started? These smart strategies will help you see success.
1. Prioritize your monthly bills first
Your spending is typically broken down into two categories: needs and wants. When you have existing monthly bills–like utilities or loan payments—these are things you need to pay. Your wants, on the other hand, no matter whether they are a new TV or a meal at your favorite restaurant, should always be a lower priority than your needs.
How does this play out when it comes to monthly budgeting? Factor in the total cost of your monthly bills, any existing credit card debt, mortgages and other outstanding loans as the amount you must pay first. Don’t give in to temptation and splurge when you get your paycheck—instead take steps to ensure that money goes to the right place.
2. Address any collections
You can avoid their phone calls or toss their letters, but that won’t make collections agencies go away. Instead, get proactive with any debts and come up with a payment plan that works for both you and the creditor. If you make regular payments and you are committed to removing the debt, the creditor may even stop reporting it to credit bureaus.
3. Make a plan to pay down existing credit cards (and stick with it)
Total credit card debt in the US topped $1 trillion in 2017, which is giving many lenders and economists pause. For perspective, that number would mean an average household credit card debt of more than $8,300; it’s no wonder that so many people are having trouble getting out of a cycle of debt. If you are carrying a credit card balance, it is in your best to pay it down as quickly as you can—and then rethink your credit card strategy altogether.
Easy steps you can take to start addressing a high credit card balance include:
- Setting up payment alerts: Don’t miss another payment by setting up automatic alerts both before and when your bills are due.
- Reschedule your due date: If you get paid at the beginning of the month, and your credit card bill is due at the end of the month, you might not have enough left to make a payment. Instead, check with your card provider to see if you can rearrange your due date to coincide with your paycheck, so you prioritize this payment above others.
- Hide your cards: If you keep spending on top of the balance you already owe, you’re making it harder to get rid of your debt. Avoid using your cards while you instead focus on paying them off.
4. Apply for the Green Dot® Platinum Visa® Secured Credit Card
Looking for a credit card that’s easy to use and won’t tempt you to max out those high credit limits? Try applying for Green Dot’s Platinum Visa Secured Credit Card. When you open a secured credit card, you’re required to make a security deposit—and the amount of that security deposit actually sets your credit limit. Typically, this means if you deposit $500, you’ll get a credit line of $500. That way, you’ll maintain a credit line you’re comfortable with so that your bill won’t spiral too far out of control. With the Green Dot Platinum Visa Secured Credit Card you’ll also get simple fees and the ability to make convenient cash deposits at thousands of participating retailers nationwide.
Another benefit of secured credit cards is that your activity will be reported to the credit bureaus—meaning this is your opportunity to show off just how responsible you are with borrowing money and paying it back. Plus, if you continue to make on-time payments in full, you’ll be adding to your positive payment history which will ultimately help boost your score.
Don’t put off improving your credit for another day, and start implementing these easy and effective techniques. Apply to get your very own Green Dot Platinum Visa Secured Credit Card today and be sure to check out Green Dot’s simple fees.