The importance of a credit rating isn’t something that is taught in schools. It’s something that you’re usually either taught by the people around you or by bad experiences. If you’ve managed to get yourself out of a financial ditch, then you may be doing everything within your power to make sure that you don’t go back there. While some may find it easy to keep their credit score in the good books, others may still struggle. In case you need a few tips for maintaining good credit in the upcoming year, you’ll find some that you can put into motion below.
Update Your Budget
To begin with, if you want to maintain good credit in 2019, you should update your budget. If you had one in the past year, then you can probably attest to what a saving grace it was when it came to improving your finances. Budgets are important because they help you stay focused and avoid spending money that you don’t actually have. As you know, that could land you right back in debt and that’s probably the last thing that you want.
Perhaps start by reviewing your expenses for the past year and identifying any areas that could use improvement. If your income has changed, don’t forget to update that in the expenses part of your budget. You can then adjust your outgoings and cut down if necessary.
Set New Goals
Usually, goals are a great way to keep yourself on track financially. Set new goals that get you excited about resisting impulse buys and cutting back. To set financial goals, remember to separate them into both short and long-term goals. Ponder on what kind of things could enhance your life and create memorable experiences for you. It may be to travel the world in a year, buy a new car, or save towards starting a business. Don’t limit yourself and know that with careful planning, you can achieve any of your goals. However, before setting any goals, make sure you have at least six months of your salary set aside in case of an emergency.
Improve Your Income
Once you’ve laid the foundation and have developed the right skills needed to maintain healthy finances, you should think about increasing your income. Doing this after stabilizing your finances can sometimes be a better option as if you increase your income but still have poor money management, you’re likely to go around in circles.
Having said that, think about how you can generate another stream of income and be open to trying different approaches. One could be freelancing in your area of expertise or starting an easy-to-manage e-commerce business alternatively. You can then use the extra income you generate to help achieve your goals.
Continue Borrowing Responsibly
Borrowing responsibly is one important way to keep your finances in order. For this reason, you’ve got to make sure you continue this habit in 2019 to keep your credit score high. As a reminder, to borrow responsibly, make sure you pay back on time and pay back more than the monthly amount agreed where possible. Also, only borrow if you’re sure that paying back won’t be an issue.
An added benefit of borrowing responsibly is that you’re likely to get better interest on any loans you might take out. If you look at, https://www.crediful.com/best-personal-loans-for-good-credit/ you’ll find a number of personal loans that are suitable for people who happen to have good credit.
Avoid Unnecessary Expenses
One of the easiest ways to ruin your credit is to accrue unnecessary expenses. Remember to stay within budget and focus on only buying things that you need. The good thing about budgets is that you can create a bucket for miscellaneous or random expenses so that it doesn’t feel like you’re in financial bondage.
However, as a rule of thumb, remember to give yourself a day before making any major purchases so you have time to think about whether you actually need it. You may also be able to find it somewhere else for cheaper if you take the time out to look.
Increase Your Credit Limit
In addition to the mentioned, increasing your credit limit could also improve your credit score. If you happen to have a credit or store card, increase your amount where possible, but avoid maxing out your cards. The point of increasing your limit isn’t to spend more but to instead use that increase to improve your credit score. Paying back twice what you’ve spent twice a month may also help as well.