Credit Score Tips

Tip #43: Save.

One of the best ways to ensure that your credit rating stays good is to save money each month. Whether you are able to save $25 a month or $200 or even more, saving and investing your savings will prepare you for financial emergencies, will get you out of overspending, and will allow you to build investments that can help you in later years.

With savings at your bank, you don’t have to worry that sudden illness will make you unable to pay your bills, resulting in dings on your credit.

Saving ten percent of your income is a nice, reasonable goal. You can use your invested savings to make certain that your debts never get overwhelming. Most employers and banks will even deduct a certain amount of money from your paycheck or account each month to be put into investments.

This can be a very convenient way to save, as you are unlikely to miss or spend money you have taken out before you can get your hands on it.

Tip #44: Keep track of your money.

Most people are surprised by how quickly their money seems to be spent. This is because impulse spending and small-change spending really adds up. Small-change spending is small spending we do without even thinking about it - buying a coffee or a newspaper we don’t need.

Impulse spending refers to simply buying things we don’t use or need. In both cases, we end up spending too much unnecessarily, and this is a problem in credit repair because you want to be channeling as much money as you can into savings and debt repayment so that you can repair your credit.

For a month, try keeping a daily record of every penny you spend - including the money you spend on phones, the money you spend on tips, everything. You will be amazed where your money goes. Keeping track of your money this way does two things:

1) It automatically cuts down on spending. If you have to write down where you spend your money, you will be much more careful what you spend your money on.

2) It allows you to see where you waste your money and take steps to stop the bad habit. If you notice that you always buy the newspaper on Saturday but never read it, for example, you can stop buying the paper on that day. Small savings can add up over the years and can put you in good financial shape which will be reflected in your credit risk rating.

Tip #45: Take out one pleasure and save it up.

• Do you have cable?
• Do you subscribe to a lot of magazines?
• Do you build your DVD collection so fast that you can’t even watch all the movies you collect?

We all entertain ourselves with money, but most of us have at least one or two entertainments that we have either outgrown or don’t enjoy as much as we once did. Cutting that expense out and investing the savings can put us well on our way to saving for retirement or paying off our bills. If you give up your cable television, for example, you can pay off your credit cards that much faster, improving your credit score.

Tip #46: Build assets and capital.

Whether it is buying a car, a home, or creating an investment portfolio, having assets can help improve your credit score by allowing you take out secured credit, or credit in which your assets are used as collateral.

When you take out secured credit (such as a mortgage) you enjoy lower interest rates and easier approval. As you repay your secured debt, your credit score will improve. Even better, lenders do look at the types of credit you have. If you have a mix of secured and unsecured credit, you will enjoy better risk rating scores as it will indicate that you have the means to repay your debts.

Building assets and capital is also a way of building financial stability which can help protect your credit score. If you have assets such as savings or investments, then you have a way of generating income or repaying debts in case of an emergency. You also have ready money you can use in case of unexpected medical bills or other problems.

Tip #47: Find more ways to income.

While you are repairing your credit, you will want to channel as much money as you can into savings and debt repayment. For this, having a second income or even just a few hundred dollars a month more can mean that you get your credit into shape faster.

Having a secondary form of income can also keep your credit safe - if you lose your job, you can use the money you make from a secondary source to repay your bills until you find another form of employment.

There are many ways to get more income:

• You can ask your employer for a raise.
• You can start to sell something through the Internet or through a company.
• You can establish your own small business that can be tended to on the side.
• You can rent out part of your home to make some extra money.
• You can get a part-time or weekend job.

Whatever you do, finding an alternate source of income can help your credit immensely.

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Why good financial habits equals a good credit score How to boost your credit rating by saving money Protect your credit score by preparing for emergencies Understand your credit score by thinking like a lender Raise your credit score by avoiding frequent changes Repair your credit score by being organized How loans affect your credit score How to make credit repair easier on yourself Credit repair for students How debt affects your credit score Detach any emotion from credit repair How to deal with collection agencies