People who have bad credit are usually guilty of not paying bills on time, overusing credit cards, having too many credit cards, or borrowing too much money. The first step in improving your financial score is keeping your spending under control. You should have a specific budget to help you learn to spend money within your means. You should also only take on what you can afford.
- Have a savings plan.
It's a good idea to start a savings account and put the money you save each month into that account. It's a great way to have a safety net for unexpected events like a job loss or car repairs.
- Use your credit wisely.
If you have a lot of credit and you're paying high interest rates on some of it, you should avoid the cards with those rates. There are credit cards out there with no annual fee that will save you a lot of money in the long run.
- Get insurance and save money.
For day to day expenses you can save by getting insurance. When you have to pay $500 a month for car insurance, $150 a month for home insurance, and $100 for life insurance, holding onto the policy for 18 months will pay off in the long run.
- Pay off your bills on schedule.
If you have debt you have less control over then you have when you don't have debt. It doesn't make sense to be stuck making minimum payments when you should be putting more towards your goal. By paying bills on time you'll be able to avoid late fees.
- Refinance your home.
You can refinance your mortgage at a much lower rate than what you are paying currently. You can save over $100 a month on your mortgage payment and $ reflects on the principle of your loan.
- Get a part time job.
If you don't have enough time to track your spending then you should look for some extra work. The extra income can help pay down some of your debt. If you are looking for work go to your local mall, call your mortgage company, or check out ads online. There are many places that may be hiring.
- Sell some of your items
There are many things you can get at your local second hand store. You can also take a look on eBay to see what you can find new.
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