Spring Cleaning Your Credit
When people think of spring, they often think about budding flowers, warmer temperatures, and possibly best of all, spring cleaning. Spring cleaning generally represents deep-cleaning a home, but there's no reason it can't also include thoroughly revamping a person's finances. Many people leave their financial situations on the back burner because they might have bad credit, they might not want to mess with invalid entries on their credit reports, or they don't have time to switch from paper billing to email billing. However, spring is the perfect time to get everything finance-related in order and organized for easy borrowing and repayment. These are several tips for spring cleaning credit this year.
Do an Audit on All Card Accounts
The first thing that should be done once spring cleaning begins is a complete credit card audit. This means taking inventory of all opened cards, making a list of each and every one of them (as well as their balances and interest rates), and assessing which ones aren't all that necessary. The idea is to get rid of any open cards that don't serve any real purpose. One or two emergency cards can make for viable safety nets, but there's normally no real reason to have several card accounts open. Cut off any unnecessary cards that don't serve any sort of purpose.
Aim for a Clean Report
Next, it's a good idea to focus on getting the report in check. It's easy to start this portion by searching the report for errors and discrepancies and noting them. For example, take note of any open accounts that still appear on the report even though they have been paid off ages ago. It's a good idea to keep in mind that collections accounts stay on reports for seven years before they drop off in most cases.
If there are blatant errors on the report, they need to be disputed with the credit bureau. Proof will be needed to confirm that the errors are genuine, and also to remove the discrepancies from the report. Always report errors as soon as their found in order to have the best chance at winning a dispute.
Cut Out Clutter by Going Paperless and Opting Out of Junk Mail
There's no doubt that finances can cause quite a mess of physical clutter in the home. This is especially true if a person receives paper bills for their finances. Switch all billing methods to paperless if possible, and make sure that it is the chosen method when new accounts are opened. Paperless billing is more simple in practice as it is. Viewing a finance statement is as easy as checking email with paperless billing.
Likewise, card offers are also notorious for creating a lot of unneeded clutter in the home. This type of junk mail can easily be taken care of by taking the time to opt out of these types of offers. Opting out is easy online, and it can be done every five years.
Sharpen the Score
Even if a person is working with bad credit, a credit score can improve immensely with good habits and prompt action. The first course of action anyone should take is reducing their debt in any way they can. Pay off any outstanding debt, if it's within practical means. Additionally, make payments to creditors on time and avoid getting any late fees or costs. It's also a good idea to avoid allowing accounts to go into collections at all costs. A person's score improves when they prove time and time again that they can make financially sound decisions, and that they are responsible about using borrowed money (as well as paying it back).
Negotiate Lower Interest Rates
Many people often think that nabbing lower interest rates for their accounts is essentially off limits. However, it's often easier than many would assume. Getting lower interest rates is often as easy as calling up the creditor and question and asking about getting a more sound rate. There is no guarantee that the creditor will agree with lowering the rate, but this doesn't mean that all hope is lost. Simply continue to make payments on time and in full, and call back every few months to talk about lowering the interest rate. The chances are high that the creditor will approve eventually if they see that the account is in good standing.
Pay Off Collection Accounts
Lastly, it's imperative to do an audit of any open collections accounts. Make a thorough list of all accounts that are open, as well as what's owed on each. Many times, people are surprised to find that the accounts they owe money on don't carry heavy outstanding balances. Always pay off the accounts with the least amount of money owed first. This type of change might seem small, but the overall score will reflect these efforts in a positive manner by increasing. Those with bad credit will begin to notice their scores taking turns for the better if they choose to take this step.
If an account has been in collections for an extended period of time, it's likely that the company that owns the account will be willing to negotiate the amount for a fraction of what was originally owed.
Overall, by using these tips, anyone can begin spring cleaning their finances right away. Spring is in the air, so that means that there's no better time for a person to straighten out their finances. There's no reason anyone can't enjoy beautiful weather as well as improved finances during these warmer months!