January 1 may be the magical date for kicking bad habits, but if adopting good financial ones is on your 2009 to-do list, consider April 15 as Fiscal New Year's Day.
"A lot of people are going to be getting tax refunds they can use to take a big step forward," says Certified Financial Planner Ken Clark and author of The Complete Idiot's Guide to Getting Out of Debt. With tax day approaching, here are 10 ways to raise your credit score, rein in spending, and boost your savings account:
1. Check your credit report for errors. A mistake on your credit report may unfairly lower your credit rating. The result? Higher interest rates, for one thing. A poor credit score may also affect your ability to rent an apartment, lease a car or even get a job. Review the information on your credit report carefully, and take action to correct any errors. Under the Fair Credit Reporting Act, credit bureaus must investigate any disputed items and remove them from the credit report if they cannot be verified. If you disagree with the results of a credit bureau's investigation, be proactive and ask to have a statement of dispute included in your file.2. Don't max out your credit cards. Credit utilization – the percentage of credit you're using – is a major factor in determining your credit score. Lenders like to see you have lots of available credit, but if you're at your credit card limits, you'll lose points on your credit score. "That trips people up a lot," says Clark. "It accounts for 30 percent of your score." Set a goal to have your percentage utilization at no more than 35 percent. In other words, if you have a credit limit of $10,000, you should have a balance of no more than $3,500. To that end, it's better to have two credit cards that have available credit than just one card that's maxed out.
3. Pay your bills on time. Perhaps a no-brainer, but paying bills on time demonstrates your creditworthiness. Conversely, a history of late payments can severely impact your credit score. Even a couple of late payments here and there can be a big deal. If you're forgetful, consider automating the process by having payments taken automatically from your checking or savings account. Or arrange to make payments online in order to avoid any mail mishaps.