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New Year’s Challenge: Credit Card Debt Down, Credit Score Up

2012/12/17 by

It’s hard to believe that Hanukkah ended a couple nights ago, and that Christmas is just around the corner–a mere 8 days away. It seems that December is whizzing by, and before you know it, January and the new year will be upon us. Many people choose to make resolutions for the New Year, such as weight loss, better money management, or some other personal goal. This year, I encourage consumers who are in the hole with money to seriously consider making personal finances their number one priority, especially after a very recent Consumer Financial Protection Bureau study revealed that the biggest factor in determining one’s credit score is their credit card usage. And–this part is shocking to me–even though we as consumers are allowed to check our credit report & scores for free once per year, the study found that fewer than 1 out of 5 people actually checks their credit report each year. People!! What are you waiting for? Get a copy of that puppy and get to work on it! Start with chipping away at your debt each month, and laying off the plastic, and we’ll go from there. Molly McCluskey of Daily Finance shares the key points of the CFPB’s study here:

“A person’s credit card usage is the single most important factor in establishing their credit, according to a new study released Thursday from the Consumer Financial Protection Bureau.

The study analyzed data from the largest reporting agencies and found that “credit card history dominates the information in credit reports.” “

Click here to read the highlights of the credit report study which McCluskey has put together.

Don’t know where to begin? Don’t be discouraged. Keeping a budget will be your best friend in terms of tracking your income and outgoing funds, and seeing where you need to make some changes. Not to mention there are dozens of apps these days that help remind you to pay bills, set you up to pay off debt, and track your spending. My personal favorites are, DebtMinder, Manilla and Bill Tracker. Check them out and try them out in the New Year to develop good finance habits to last all year long.

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