Image Credits: Freepik
Congratulations!
You’ve passed the bumpy 2022 road to make it successfully to 2023.
It's D-1, the day you'll probably review your aspirations and resolutions for the upcoming year.
In fact, you must be reflecting on 2022 and being reminded of all the errors and financial blunders you commit.
Are you thinking of making 2023 your best financial year? Do you desire to make choices that will benefit your investments, savings, and retirement? Do you wish to set financial objectives that will improve your credit profile?
We’ve got you!
Mentioned below is an updated list of 2022 credit tips.
Disclaimer: This guide will teach you what financial practices you need to continue and what not! Let’s begin:
Image Credits: Freepik
Surely, the new year brings a new chance to change your financial situation. But, your bank accounts won’t have new money just because it’s a new year. :p
That’s only possible if you really think about swapping the same old 2022 mindset with a new and upgraded approach.
You need to literally wipe out debt from your life and only then can you hope for a better financial future.
Image Credits: Freepik
Applying for a new credit card might not be the best resolution to add to your list. Here’s why:
In fact, applying for multiple cards may initiate a credit inquiry which will impact your score in a bad way. And, as you decided to make good choices in 2023, that’s the last thing you want to do for your finances.
However, if you really do need to get a new card to set your failing financial planning, top credit experts advise you to go for a secured credit card.
Image Credits: Freepik
The best way to set your financial journey straight is by making sure you are doing everything for it!
Paying bills on time everytime is one sure way to do it. Didn’t understand the link? Here’s what we mean:
Well, you do the groceries, pay for the utilities, and clear the rental payments monthly, then why not benefit from it? Yes!
Not all the credit scoring models will consider these payments while making your credit profile. It’s you who has to verify and confirm that your on-time payments are making it to your credit report.
Image Credits: Pexels
Your credit report works as a mark sheet for your finances. It included all the rights and wrongs you’ve been doing with your money. So, it’s important to ensure there’s nothing inaccurate and incorrect about it!
You don’t want to drag your credit score by something you didn’t do. Wondering what to do? Here’s a helpful guide for you:
Image Credits: Freepik
Surely, paying down the debt has to be the top on your list of financial resolutions for 2023. However, you can’t just pay whatever and accept your credit score to rise. There has to be a proper strategy, plan, and thought process in what you pay and when you pay.
The main purpose to do so is reducing your overall outstanding balance so that it can help you lower your credit utilization ratio.
And, if you have dealt with a bad financial year 2022, we definitely don’t need to tell you the importance of the utilization or how essential it is for your credit score.
Image Credits: Freepik
The financial loans analyst, Brianna McGurran suggests if you take the right steps to improve your finances, you can surely reduce your rate of borrowing.
Following that, if one thing that can guarantee your finances remain in the best shape is probably the review and evaluation. You can’t continue to follow the same 2022 budget and expect 2023 to be a better financial year.
Instead, you have to change what you’ve been doing to handle your money and constantly revisit all the strategies and financial plans. That’s the only way to find what’s working and what’s not.
Related Article: Your Guide To Personal Finance Review & Evaluation!
Image Credits: Freepik
You want to rebuild your credit. Yes, you want to get good loan terms. Of course, your goal is to retire early and have a full savings account. However, nothing can happen on its own. As we said earlier, you have to put in your effort to really make a difference.
Still, sometimes, things can become too overwhelming and we need a helping hand that can point out the obvious. So, here are some credit mistakes you might be doing in 2022 and should not be doing in 2023:
Image Credits: Freepik
Credit cards can be a blessing or curse depending on how you use them. Yes, it’s true that handling money in real-time might be easier for some but you can’t just simply ditch the idea of rewards, bonuses, travel points, and discounts just because you can’t control your sudden spending sprees!
See: 30 Day Rule To Avoid Overspending!
Image Credits: Freepik
Missed or late payments can cost you more than you can ever imagine. When you fail to clear the bills once or twice in a row, the interest rates can rack up higher and you may end up paying double the amount.
Moreover, you might also have to deal with penalty fees, late payment fees, and a reduced credit score.
See: 4 Ways That Ensure You Pay Your Card Bill!
Image Credits: Freepik
Yes, clearing your debts is essential for a good financial life. However, when you are focused on paying everything at once, there’s a higher chance that you might apply for a bigger loan you can’t afford to pay back.
So, start slow and focus on one loan at a time. Or, either use the balance transfer if you find a card that offers the lowest interest rate or comes with 0% APR for introductory period.
Image Credits: Freepik
If you want 2023 to be a year full of investment and extra income, you have to be smart with your money. Wondering how? Here’s what you need to do:
The lower the ratio, the higher your chances of getting the loan on your terms. A low debt-to-income ratio shows that you can handle the additional money.
A good credit score and financial profile is only possible when you maintain a good credit history.
Financial market introduces a new card almost every day. Literally! So, if you want to be smart with credit in 2023, you need to avoid the temptation of giving into these promotions.
Lastly, educate yourself on how credit works! Watch financial podcasts, study blogs, read success stories, subscribe to money newsletters, etc.
Change your financial practices to change your financial future!
We hope you enjoyed this guide and learnt something new while reading it. Let us know what you want to read next. :)