[I]f you have a goal to improve your credit score for the new year, you need to set up steps to help you achieve this goal. For many, they read all kinds of information about how to get a good credit score, and it can be overwhelming. Sometimes, it can sound so easy but not work. Other times, it can seem like it will never happen. Here are some steps to take to ensure you have better credit for the new year.
Pay Your Bills on Time
If you have a history of late payments 30 days or longer past due, this is the place to start working on your credit score. Begin paying all of your current bills on time. If you only do this one thing, you’ll see an improvement in your credit score by the end of the year.
Pay Down Your Balances
Another area where you can make big improvements is by paying down your balances if you’ve maxed out your credit cards. Even if you can only pay down half of each card, you’ll see a major jump in your credit score as long as no new negative information is added to your credit report.
Pay Off Collections
Even one collections account will hurt your credit. If you have outstanding accounts with unpaid balances, you should work on getting them paid off. It’s best to pay them in full. However, it this isn’t possible, try to negotiate an amount the creditor will accept. An account marked as settled for less than the full amount is still better than one unpaid.
Add New Credit
If you’ve worked on the other areas, you need to begin adding new credit to your report. A secured credit card is one option which will help you build good credit. It will take a few months of using this card and paying it off to see a difference, but it will make an impact.
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