With many people out of work because of the pandemic, last year was a difficult year, financially speaking, so why not make things a bit more predictable in 2021? If you are looking to repair your credit score, the new year is an excellent time to take stock of your financial habits and make any necessary changes.
Are you ready to start raising your credit score? It’s time to set some new financial habits. Here are a few things to know.
Refinancing a Loan
If you have a loan, especially a mortgage loan, you may have seriously considered refinancing your loan to get better terms. Refinancing can not only save you thousands of dollars in interest payments over the life of your loan—it can help you pay off your loan faster.
However, refinancing can also lower your credit score, at least temporarily. If you are considering refinancing, you should speak to a financial expert first. The best course of action depends on your situation.
Stop Charging More to Your Credit Cards Than You Can Pay Off Each Month
Do you need to keep a balance on your credit card to build credit? Many people would say yes, but that is a myth that has refused to die for a long time.
Having experience with different types of debt—mortgage, credit cards, student loans—is good for building your credit score, but if you are trying to repair your credit score, carrying a lot of credit card debt can thwart your efforts.
In 2021, try to pay down your credit card debt. If you can, pay off the balance every month.
Stop Ignoring Your Credit Score
If your credit score is less healthy than you would like, you are not going to improve it by pretending the problem is going to go away on its own. To repair your credit score, you need to actively work to improve it.
One of the primary reasons people ignore their credit score rather than trying to improve it is that they don’t know what actions to take. If you are not sure what steps you need to take to raise your credit score, a financial adviser can help steer you in the right direction.
Think about Last Year’s Mistakes
You can’t repair your credit score if you don’t learn from the mistakes that damaged it in the first place. Every single person can probably learn a lesson or two from the challenges of 2020.
Whether you lost income and had no backup plan or missed loan payments, you don’t have to let past mistake define your future. Take some time this year to reflect on what you went through last year and try to learn a lesson or two that could help you improve your financial health this year.
Repair Your Credit Score with Expert Help
If you need help getting your credit score where you want it to be, get in touch with U.S. Credit Defense today.