Friday’s Credit Tip #28: Stay Financially Organized

Credit repair tips by Dominique Brown.

Staying organized and on-track is very important when you are trying to boost your credit score, because there are so many details to follow up on and so many things to remember. A few basic organization tips can help make sure that you do not overlook anything that can cost you your good credit score.

Keep all your financial records, including your tax records, in one place. Note the days you paid your bills on the bills themselves. Note how much you owe and where you owe money. Keeping your financial information in one place allows you to refer to it easily. Seeing your financial picture in one place also makes it easier for you to see where your credit and your finances need work.

Some of the information you may want to keep in your financial file includes:

  • Bills
  • Tax receipts and forms
  • Articles and pamphlets about debt
  • Your credit reports and scores
  • A list of contacts that affect your financial life (such as your bank and credit agencies,for example)
  • Your written emergency plan, detailing what you should do in case of a sudden loss ofjob or other problem
  • Banking information
  • Financial forms
  • Investment information
  • Deeds to your assets (such as your house)
  • Agreements you have signed for loans and other financial services
  • A list of your financial goals
  • Insurance forms

You may want to buy a box and keep your separate information in different labeled folders (tax information together, for example, and bills in another folder) for easy referencing. Whatever system you use, you will find it much easier to manage your finances, and your credit, if you don’t have to hunt for random pieces of paper.

Set Short-term Goals and Do Frequent Credit Self Checks in Order to Track Your Progress

Credit repair takes time and effort. Some days, it will seem that you are getting no closer to a

better credit score at all. In order to keep track of your progress and in order to keep going forward, you need to set goals and keep track of what you are doing.

For example, setting a goal such as “I will improve my credit score” is far too broad. Set smaller goals, such as “I will talk to my bank about budgeting this week” or “I will pay off half my credit card bill by next month.” These goals work better because they are manageable and have a built-in deadline.

Writing your goals on a calendar or planner you look at every day will motivate you to keep working on your credit repair and will keep you making the small steps that can lead to better credit. If you review how far you have come each month or week, you can really keep track of your progress and see how much you still have to do.

Take Care of the Details when Applying for Credit or for a Credit Report

Little things make a big difference. Misquoting your social security number or using a slightly different name (Jane Doe Smith instead of Jane Smith) can make a big difference, since credit bureaus can count the two names as different people. Making sure that you fill out each financial form accurately and in the same way can go a long way in ensuring that there are no mistakes in identity that can affect your credit score.

Don’t Make the Mistake of Thinking that Small Differences in Credit Scores or Loan Interest Rates Won’t Make a Big Impact

A few points on a credit score can mean the difference between a lender offering you a prime rate reserved for the best credit risks and the worse interest rate offered to less than prime customers. This may amount to only a few percentage points in different loan rates, but this can make a huge impact, especially on a large purchase. For example, a few percentage points on a long-term fixed-rate loan can mean the difference between tens of thousands of dollars saved or tens of thousands of dollars overspent.

It is in your best interest to boost your credit score by every point you can and to fight for the very lowest interest rate loans you can. After all, if you have larger payments each month due to a higher interest rate than you deserve, it will be harder for you to repay your bills. Also, you will qualify for fewer loans if you have higher-than-needed interest rates, as you will be able to afford fewer of the larger monthly payments.


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