Building Great Credit
Do you hope to purchase a home, apply for a loan, or upgrade your current vehicle? Having a strong credit record will help you achieve these goals with better rates than with low credit scores. Like building a home, a stellar credit score doesn’t happen immediately. It takes persistence, mindfulness, and a strong upbeat mental attitude. In essence, you must make a plan and work the plan. With funds set in place and consistent on-time payments, you can confidently build a strong credit score within about 6 months!
A key to your financial credit health is knowing your budget and maintaining a solid record of your spending.
Make the Plan
Home construction managers need a blueprint before building a home. Building strong credit also requires a plan of action. Here are some helpful tips:
- Write a plan of what you will be purchasing with your credit card and specifically how you will pay it off. Having due dates for each creditor and also any type of bill you may owe in writing can help you be proactive with ensuring that every payment is paid in full and on time! Keep in mind that all credit card and loan payments will impact your credit score.
- Budget, budget, budget! It is imperative. Establishing a monthly income-based budget is a wise way to maintain financial stability, especially when using credit cards. You can stay organized by allotting anticipated expenses for each monthly need category (i.e. rent, groceries, car payments). LSS Financial counseling provides an expense tracking form and periodic expense chart to help you succeed. For more tips and apps ideas, check out The Secret to Starting a Budget.
Once you have made your plan, be accountable and follow through. As you stay the course, you will be rewarded for the discipline you initiated and feel more confident each day.
Work the Plan
- Be on time with each payment and avoid partial payments. This is important as payment history is the largest component (35%) of your credit score.
- It is important to keep track of your purchases and compare it frequently with your budget. A helpful tip is to set aside a time each week to review your spending and online bank statements.
- We all know it is not wise to spend money we don’t have. Knowing the amount that is in your bank account and budget gives you assurance as you make credit card purchases. It is helpful to confirm that sufficient current funds or near-term future funds are in place before charging the credit card. You will be grateful in the long run, as credit card interest can be unforgiving and unforeseen/untracked purchases can compile to an unbearable load once accumulated.
- A friend, family member, or spouse can be provide great accountability for helping you remain true to your financial goals. If you have a partner, you have the opportunity to make a joint financial plan and ensure that wise financial decisions are a main priority for your life together. Some ideas include setting aside time to meet and discuss financial strategies and evaluating your joint progress by notifying each other of purchases.
We are Here to Help You Succeed!
- Coaching – The LSS Financial Counseling team is eager to support you along your journey to financial well being! Whether you are already in a strong financial position and want to develop strategies to maintain it or if you have hit a bump in the road, we are here to help. Meeting with a certified Financial Counselor, you will gain an understanding of your financial condition and receive a debt management plan tailored to your needs and goals.
Call us at 888.577.2227 for your free financial counseling session or click to GET STARTED ONLINE.
By Joy Rasmussen, member of our DMP Support Team with LSS Financial Counseling