Summer is the easiest season to reason with somebody as to why they went on a two- to three-month-long overspending campaign right when warmer weather started coming around earlier this year. According to a survey from ING, the general public also believes that they are more likely to spend more money throughout summer than any other season. So, it’s understandable why you overspent. Here are five ways for you to reset your finances and get back to normal.
Bring Credit Card Utilization Ratios Down
Every credit card has an upper balance past which customers can’t spend any more than. When people max out their credit cards, their credit scores take a hit due to the increase in credit card utilization ratio. You should not have more than 30 per cent of your maximum credit card balance taken out at any time, as doing so substantially lowers your credit score. Thirty per cent is an ideal ratio if you’re looking to build a credit history, by the way.
See If Your Credit Report Is Correct
Since you spent too much these past few months, you might not have noticed unauthorized transactions wedged between all the ones you made on your spending sprees. As such, get a copy of your credit report – if not three copies from each of the three major credit bureaus – and see if any debts do not appear to be accurate. You may find that one or more debt accounts were charged against you by mistake.
Set Up an Appointment With a Personal Finance Guru
One of the best ways to learn about succeeding in personal finance is to get individualized help from a personal finance advisor, analyst, or else-wise-named professional. The personal finance pro could help you see mistakes that you’re currently making that you had no idea were even bad ideas in the slightest.
Most city governments across the country offer free credit and personal finance counselling services. As such, you may be able to find such services where you live instead of having to fork over money for them.
Start Cutting Your Balances Down Immediately
If you don’t have any balance on any of your debt accounts, you will soon end up having a non-existent credit report. While this can be used to some people’s advantage, you should be crazy about obtaining a great credit score. The single most important factor in the calculation of people’s FICO scores, also known as their credit scores, is how much money they owe to creditors.
Don’t Apply for New Forms of Credit or Debt
Taking out short-term loans or money on lines of credit or credit cards is often a bad idea because they come with high-interest rates. Credit agencies reason that if people are scrambling to get their hands on loaned assets from multiple potential sources, they’re almost certainly going to make a bad decision with whatever money or valuable assets that they get their hands on.