If the words “credit check” fill you with stress, you are not alone. In fact, only 21% of adults say they check their credit score monthly (source: Credit Card Insider).
The good news is, there are plenty of things you can do to improve your credit wellness. Ana Salazar, a U.S. Bank goals coach, compares it to a physical fitness journey.
“It’s not about perfection but about starting where you are, learning from your past and taking small steps each day to move forward.”
Here are some of Ana’s tips for your credit wellness journey.
Just like you’d weigh and measure yourself at the beginning of a fitness journey, it’s important to know your starting point as you work toward credit wellness. The best way to do this is to request your free credit report from the three reporting bureaus: TransUnion, Equifax and Experian. Your credit report is a detailed account of your financial activity. Click here to learn more about credit reports.
Once you have your report, take the time to review it closely, checking for errors and prioritizing the debt you need to repay.
“Credit can be stressful for a lot of people,” Ana says. “The idea of sitting down and looking at a detailed report of your finances is a lot to handle.” She offers some suggestions for making that first step easier:
“Block your calendar for an hour when you can focus on the task. It probably won’t take that long, but it’s good to have that time set aside.”
“One of my coworkers eats Oreos while she works on her budget to make it a little more fun. You could make a playlist of upbeat songs to boost your mood.”
“This is especially important if you’re on this journey with a partner. Looking at your finances together can be stressful on a relationship. When you’re done, share a special meal or do an activity you both enjoy to celebrate your work and deepen your connection.”
Your credit score is a number that summarizes your overall credit, and it’s used by many lenders to make credit decisions. While you should review your full credit report once a year, checking your credit score monthly lets you monitor your progress and will alert you to any problems.
“Make it easy for yourself,” Ana says.
Small changes can have a huge impact when it comes to credit. Here are a few things you can start now to get on the right track.
Be in control of when you pay your bills. Schedule automatic payments on the same day as payday. Paying on time can positively impact your credit history. If necessary, utilize alerts or reminders to ensure you make timely payments.
The quicker you pay off your credit cards, the better it is for your credit well-being and your peace of mind. Strive to pay more than the monthly minimum payment. When you can, pay the whole amount as soon as possible to avoid increasing interest.
Staying below your credit limit will help you avoid incurring unnecessary fees as well as reflect positively on your debt-to-credit ratio.
An important part of building your credit history is being responsible with your credit. If you run into a situation where you can’t afford to make your payment, please reach out to your lender. You don’t want late payments or collections going on your credit report. If it feels scary to make that phone call, just remember: Your lender wants their money back, and they may be able to work with you to figure out an arrangement.
Ana says, “Whether you are just starting out with building credit, have had some issues with it or are working on maintaining it, remember that hard does not mean impossible. Where there is a will, there is a way, and you will find your way.”
The journey to credit wellness is just that: a journey. Start by understanding where you stand, and then, make small changes that will have a big impact.
To learn more about goals coaching or schedule a free goals discovery session, visit usbank.com/exploremygoals.