May Financial To-Do List + Calendar

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We’re coming to the halfway point of the year, and it’s time to take a close look at your credit. Is your score where you want it to be? If not, keep this calendar close at-hand. Our May financial to-do list is designed to help you take inventory of your credit health, and take actions to raise your credit score.

  1. Check your credit score
  2. Dispute any incorrect marks on your credit report
  3. Determine which credit factors need improvement
  4. Follow best practices to improve your credit score
  5. Assess new credit options

 

1. Check your credit score

The essential first step when assessing and improving your credit health is to check the current state of your credit score. Seems simple enough, but a whopping 18% of adults ages 18 to 24 say they never check their credit scores. There are two main ways to assess your credit score:

  • Request a free credit report: Keep tabs on your credit by accessing a free credit report; you can request a free copy of your credit report from each of three major credit reporting agencies: Equifax, Experian, and TransUnion. A credit report includes your credit score, along with credit account history, credit inquiries and public records. This information is reported by your lenders and creditors.
  • Check your credit score: If you’d like to keep tabs on your credit score on a monthly basis, download Mint and check it for free.

2. Dispute any incorrect marks on your credit report

When examining your credit report, look for any errors. Common errors you may spot include:

    • Payment history errors
    • Information that belongs to another consumer
    • A closed account still reported as open
    • Inaccurate credit limits or account balances

If you do spot an error within your credit report, you’ll need to contact the company that supplied the wrong information, which might be your bank or utilities provider. Once you’ve cleared up the issue with said provider, you can report the mistake to the credit bureau. When you do, include evidence, and send in a paper copy of your credit reporting highlighting the mistake.

Once their investigation is complete, the credit reporting bureau will provide results and send you a free copy of your updated credit report

3. Determine which credit factors need improvement

A credit score is generated using an algorithm that predicts risk. Turbo and Mint both provide a VantageScore, which is calculated based on the following categories:

  • Amount of Recent Credit: 30%

This looks at how many new credit accounts you have.

  • Payment History: 28%

This assesses whether you have satisfactory or delinquent accounts.

  • Utilization of Current Credit: 23%

This takes a look at the amount of credit you use.

  • Size of Account Balances: 9%

This measures the amount of your current and delinquent balances.

  • Depth of Credit: 9%

This measures the length of your credit history and types of accounts you have.

If you find that you are doing better in certain areas, focus on improving your credit factors that need help. If you have a great deal of delinquent accounts, make a plan to pay them off. If you’ve recently requested a new line of credit, try to avoid requesting new lines for the foreseeable future to help increase the average age of all accounts.

4. Follow best practices to improve your credit score

  • Pay bills on time: Never miss a payment again by setting up automated payments. 
  • Keep credit utilization below 30%: Lenders like to see credit utilization below 30%; however, this isn’t the end-all, be-all goal. In fact, individuals with a credit score of 800 or above generally use less than 5% of their credit limit.
  • Try to avoid opening too many new accounts in a short period of time: Requesting new lines of credit reduces the average age of all accounts, which is an important factor when determining your credit score.
  • Make a plan to pay down existing debt: Craft a strategy to start making a dent in any debt balances owed, such as student loans, car loans, or credit card balances.
  • Don’t close unused credit cards: If you have an extra card that you don’t use, don’t close right away. That extra card may help keep your credit mix broad and extend the average age of your accounts. However, there are situations in which you may want to close a credit card, so consider your options.

5. Assess new credit options

If you are in need of a new line of credit, examine your options carefully. There are three general types of credit card:

The best credit card for you depends on your current financial needs and future goals. Check out these credit card options and find the right option for you.

Key Takeaways

Prefer to organize online? Create an editable copy of our May monthly template in three simple steps:

  1. Open our Calendar Template in Google Sheets
  2. Select “File”, then “Make a Copy”
  3. Save in your own Google Drive to make edits

Missed our calendars in January, February, March, or April? Our finance tips can help you throughout the year so be sure to take a look!Improve your finances 2020 with our series of financial to-do lists tailored to each calendar month. Look forward to financial topics including investing, paying down debt, and more.

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