4 Tips to Follow When Building Your Credit

4 Tips to Follow When Building Your Credit (1) (1)

Your credit history has massive impact on your personal finances, as well as your entire life.  Individuals with poor credit, or no established credit at all, face many challenges when it pertains to milestones in life like purchasing a new vehicle or your first home.  Once you have established credit, it may be difficult to manage. It is important to remember, credit options may not make you dish out money immediately, but they do need to be paid back; this is where the difficulty may come in.  Nevertheless, credit can always be built back up.  

Here are 4 tips for building your credit.

Make Sure Your Credit Reports are Accurate

With the evolution of the internet, there are many ways for someone to look up their credit reports; some resources will provide one score, while others will go more in depth with a full credit report. There are three major credit bureaus that your credit report and score is based off of, Experian, Equifax, and TransUnion. It is important to make sure that when you are accessing these scores, they are accurate.  If you see something on your report that isn’t supposed to be there, or it is not accurate and negatively affecting your score, you can attempt to dispute it.

Confirm Areas That Need to be Improved

Once you analyze your reports from all three major credit bureaus, confirm what areas need to be improved.  Whether it is a credit card with a long term balance, or a loan that you’ve missed payments on. Make note of those areas, and tackle them strategically over a period of time.  It is always important to remember that the improvement of credit can happen, but does often take some time and patience.

Make Any Late Payments

If you notice late payments on your credit report, immediately take steps to bring them up-to-date.  Late payments can affect your interest rates, and build up penalty late fees that will push back any payment progress that you’ve been making.  Always keep in mind, if you can pay off an entire credit card balance, it is better to do so as soon as you can.

Make Payments In Full & On Time

In future credit purchases and transactions, make sure to make your payments on time, and if you are able, in full.  If you are unable to pay a transaction off in full, put the maximum amount you can afford toward your monthly payment; the quicker the balance comes down, the better.  To help make your payments on time, considering setting up auto-pay. Auto-pay is a great tool to ensure you don’t accumulate late fees due to a missing payment.

Top Personal Finance Blogs

One of the most sure-fire ways to guarantee wealth and security is to pay attention to your personal finance situation. The more you know about personal finance the more money you will save. You’ll also make better financial decisions in general. I recently came across a great resource that lists the best personal finance blogs of 2016. Here’s the link to the article. The list was actually voted on by readers, so the top site, Cash Cow Couple, is a site that a lot of readers recommend. There are many other sites on the list that are worth checking out too like Dough Roller and Mr. Money Mustache. All of the sites on the list are great for inspiring you to manage your money better.

Finance Tips For New Parents

One of the most important things you can do before your baby is born is prepare a financial checklist. Raising a child is expensive, so the more preparation you do the easier the experience will be. You’ll also save more money than you would have without a plan. Below are some of the top financial tips that new parents should use when creating a checklist.

Research Health Insurance

Even with health insurance, the fees associated with baby care can add up. Do research so you know what sort of fees to expect with labor, delivery, and prenatal visit. If you estimate how much the medical bills will cost, you won’t be surprised by the final bill.  

Maternity and Paternity Leave

Does your company offer maternity or paternity leave? Do you know how many days you are allowed to take? Do you get paid during the entire period? These are the type of important questions you need to ask. If you take off for an extended period of time, and your company doesn’t provide payment, your finances can be seriously impacted.

Prepare A Baby Budget

After you estimate healthcare costs and understand your leave situation, make a budget. Your budget will guide you as you purchase necessary items. It can also help prevent you from purchasing unnecessary items. If you’re particularly budget-conscious, don’t hesitate to purchase used items. Your budget should also include estimates for the monthly costs associated with diapers, food, etc. The more budget planning you do before your baby is born, the better.

Find A Pediatrician

In order to save money, it’s important to choose a pediatrician that’s within your insurance network.  Ask friends and family members for recommendations. Also, don’t be afraid to interview potential candidates.

Start An Emergency Fund

Whether you’re a parent or not, emergency funds are a financial necessity. However, they’re especially important for parents since children are prone to accidents. As a parent, you never know when you’ll need extra funds to pay for an unexpected expense.

Health Insurance For Your Child

Add your child to your health insurance as soon as possible. Most health insurance policies give parents thirty days to add their child to a policy. The last situation you want is for your child to be sick and uninsured, so take care of this step right away.

Start Saving For Education

Every year the price of college tuition rises, so it’s never too early to start saving for your child’s education. Consider starting a 529 plan. It will allow you to save money and avoid taxes.