It’s the beginning of a brand new year and, for many, the time to make those New Year’s resolutions! Some people vow to get in shape while others seek to learn a new skill or go on that trip of a lifetime. But if you’ve clicked on this article, it can only mean one thing—you’re ready for a full-on financial transformation.
First of all, congratulations! Working to improve your credit score is a fantastic resolution. Better credit leads to more open doors and less financial headaches down the road. It may be tempting to hit the ground running, but most successful outcomes began with a plan. By following our 12-month guide, you’ll know where to focus your efforts during every month of the year to increase your credit.
January & February
Pull Your Credit Reports and Formulate Your Strategy
Welcome to your year of credit improvement! The first step in any long-lasting credit improvement strategy is to start by pulling your credit reports from all three bureaus at annualcreditreport.com and taking inventory. Look at what’s holding back your score and make a note of it using whatever method—digital or analog—that makes sense for you. You’ll want to have all of this information in one place for easy access in the future.
Next, go over each of these reports with a fine-toothed comb, taking note of any errors or questionable information you spot. This is a time-consuming process, so we recommend setting aside a day or two for this step.
Lastly, make a list of all of the debts you have: what amounts are owed, who you owe them to, any interest that may have been incurred, and all applicable APRs (interest rates). Rank them in order from the smallest amount that you owe to the largest amount that you owe. That way, when you’re ready to begin tackling your debt, you’ll know exactly where to start..
March & April
Dispute Any Errors in Your Credit Report
As you’re going through your credit report, you’re pretty sure that you’ve spotted a mistake. Your first reaction might be to panic. Thankfully, any suspicious or inaccurate information on your report can be corrected on your report. The Fair Credit Reporting Act (FCRA) gives you the right to dispute any such items with the three major credit reporting organizations. Whether you choose to reach out via mail, online, or over the phone, make sure you do it ASAP. Ignoring errors means causing more unnecessary damage to your credit score.
May & June
Cut Spending, Pull Up Your Sleeves, and Tackle Debt
One of the tried-and-true ways to bring up your credit score is to reduce your list of debts. Referring to the list you made earlier in the year, start with the smallest amount you owe. Look to your monthly budget (if you don’t have one, now is the time to make one!) for expenses that you can cut or reduce. Use those newfound savings to pay back your creditors. While this may mean forgoing your daily coffee or weekly movie night in the short term, cutting back now means getting out of debt faster.
Once you finish paying off a debt completely, move down your debt list to the next account, and repeat!
July & August
Automate Your Bills, Pay On Time, and Pay in Advance
Let’s face it: no plan to pump up your credit score will be successful unless you’re also paying your other bills on time. Since your payment history has the most substantial impact on your score, and given that late payments can remain on your report for seven years, practicing this positive credit habit going forward can help offset past missteps.
If you have trouble managing your money, it may benefit you to set up automatic payments for some or all of your recurring monthly bills. This will remove the burden of having to remember when to make your payments each month and contribute to building up your credit score.
Automating your bill payments not a viable option? Try seeing if you can pay monthly expenses in advance as soon as you get paid. That way, your major responsibilities will be taken care of, and you’ll have a better idea of what your financial situation for the month will look like.
September & October
Check Up On Your Progress
You’re nearly there! To stay motivated, take a look at your latest credit scores and reports and see how your efforts have paid off. Don’t forget to triple-check for any new errors or inaccuracies you may have missed, and tackle those immediately.
Ask Yourself, “Is Debt Consolidation Right for Me?”
Are you still having difficulties paying off all of your debts? You may want to consider debt consolidation through a personal loan. Using a personal loan allows you to combine multiple debts into a single fixed payment which then decreases the number of interest rates, due dates, and payments you have to keep track of.
For many individuals, debt consolidation can be a light at the end of the tunnel—it not only simplifies everything, but it also sets a definitive “end date” for your debt. Plus, you could lower your interest rate, saving you money. Interested in debt consolidation? Take a few minutes to fill out our online personal loan application to check offers with no effect to credit score.
November & December
Consider a Side Gig
The holiday season is here again, and with all the festivities comes a lot of expenses! One of the best ways to ward off accruing more debt is to find a means of supplemental income. Whether it be signing up as a provider on a gig app (rideshare driver, dog walker, grocery shopper, etc), picking up a seasonal retail or delivery job, or tutoring students for their finals, there are a lot of creative ways to make a bit of extra cash to cover any unexpected expenses!
See How Far You’ve Come!
Give yourself a pat on the back—you did it! While building great credit takes time, each small step you took along the way brought you closer to your goal. And if you stumbled here or there, don’t give up. Any improvement or change in behavior, no matter how small, may have brought about a significant change in your credit score.