Take Control of Your Credit Score in 2022
Our credit scores impact many different aspects of our lives. Good credit can lead to lower interest rates, higher credit line approvals, and greater rent and mortgage options. Alternatively, a lower credit score can limit our options.
Thankfully, credit scores can be improved. But what is the fastest way to get your credit score up? If taking control of your credit score is on your list of financial new year’s resolutions, we’ve got a few tips that will help make the journey smoother.
4 Ways to Stay in the Driver’s Seat of your Credit Score in 2022
- Set Realistic Goals
When we’re feeling motivated and energized, it’s easy to set big, audacious goals. And there’s nothing wrong with that. But a more strategic way to get ahead might be to set smaller, realistic goals until you’ve got a few wins under your belt.
By starting small, you allow yourself the room to grow into your goals and celebrate small victories on your journey to the finish line. Financial goals are tricky, making it easier for even a small misstep to throw us off course.
Give yourself some grace this year by setting realistic goals that allow you to work your way up. For example, instead of setting the monumental goal of paying off all of your debt, rework it into something more manageable, like making one extra debt payment each month. Even small payments will lower your debt-to-income ratio and improve your credit score.
We’ll cover other realistic goals to consider in the next section.
- Develop a Credit Repair Plan
When it comes to improving your credit score, you’ll want to focus on these five credit score factors: payment history, credit utilization, credit history length, credit mix, and the number of accounts. Use these categories to develop a personalized credit repair plan.
Three of the easiest ways to boost your credit are by making on-time payments, keeping your credit utilization under 30%, and leaving old accounts open to lengthen your credit history. Consequently, these are additional realistic goals you can set for yourself in the new year.
Creating a strategic plan that involves intentional budgeting and a focus on your goals makes it easier to hold yourself accountable. Write out your credit plan or type it up and print it out, then put it somewhere you’ll see it every day.
Add little checkboxes next to each realistic goal as a reminder to celebrate small victories. When you check off a box, celebrate by borrowing a new book from the library, making your favorite meal at home, or choosing another budget-friendly activity.
- Use Apps to Stay on Track
Using apps to stay on track with our financial goals can make the process seem more fun and more organized. It can also help simplify things if you have several different accounts, debts, or bank accounts to keep track of.
There are dozens of apps out there that will help you achieve better credit and track your spending. Here are some of the best free ones:
While Goodbudget and EveryDollar focus on breaking your spending down into categories to make it easier to track, reduce, and save, Mint does a bit more. The Mint app also tracks your credit score and goals and will warn you when you’re approaching any limits you’ve set.
For this reason, Mint is generally top-rated for an overall user and beginner-friendly financial app. But if you prefer to keep your credit tracking and budget separate, Credit Karma offers free credit checks, and Goodbudget and EveryDollar are two easy-to-use budget trackers.
- Get Professional Help with Credit Score Improvement
According to Forbes, 34% of consumers have errors on their credit reports. Following the steps listed above will help increase your credit score over time, but they won’t correct any reporting mistakes. In addition to tracking your score, Credit Karma gives you the option to report any mistakes you find in your report.
If your errors are more complex or you need a bit of guidance, Forbes also put together a list of the best credit repair companies of December 2021. They can help remove errors from your credit report so you can watch your number grow again.
*A note from Spotloan: Making decisions to impact your credit score should not be taken lightly. You should always do your research to ensure that you are choosing the best option for your financial situation. We hope this article has provided some helpful tips as you look to improve your credit score in 2022.
