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7 Non-Credit Things You Need to Do To Repair Your Credit

Posted on December 8, 2010

If you thought you could ignore the rest of your finances and build a good credit score anyway, you were wrong. Credit is an integral piece of your financial picture. If you’re doing bad in one area, chances are you’re doing bad in another area. So, there are some parts of your finances you must fix before you can start credit repair.

1. Create a budget. The lack of a budget is quite possibly one of the things that led to your credit demise. Without some type of budget, you’re more likely to overspend, leading to higher credit card balances and less money to pay your credit card bills. If you don’t already have a budget, create one now.

2. Start an emergency fund. An emergency fund is a financial safety net that catches you when you fall. It’s savings that you can use to pay for unexpected expenses. This keeps you from having to put the expense on a credit card.

3. Have a checking account in good standing.  A sign of financial responsibility is having a checking account that you can use. A checking account makes it easier to pay your bills, an essential step in credit repair.

4. Avoid overdrafts and bounced checks. Overdrafts and bounced checks happen when you spend more money than you have in your checking account. Both events result in a fee. If it’s a regular occurrence, it’s a sign that your spending is off. Overspending is one of the things that leads to bad credit and if you’re overspending your checking account, the same might happen soon with your recovering.

5. Check your spending habits. Healthy spending habits are key to rebuilding your credit history. Buy only what you can afford based on your income. It’s when you start spending more than you make that credit problems arise.

6. Financial goals for the short- and long-term. Of course, credit repair is one of the financial goals you want to meet. But what else do you want to accomplish? Having goals gives you something to work toward and gives your money a purpose. A short-term goal might be to start saving $25 a month. A long-term goal may be to save up $25,000 in the next seven years.

7. Get your family onboard with credit repair. Whether you realize it or not, family and friends are a big influence on your spending habits. If they’re used to you spending a lot of money, they’ll continue to expect that from you. Let your family, especially your spouse and kids know that there will be some spending changes to make things better for the family over all. That way, they are more likely to understand when you don’t spend like you used to.

Credit repair is a good time to evaluate all your finances to see where you can improve. Taking care of these financial basics makes it easier to repair your credit and keep a good credit score.

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