How to Increase the Health of Your Personal Finances

Everyone talks about how healthy they want to be but they are usually talking about the health of their bodies. While physical health is important, it is just as important to take care of the health of our credit and finances. It is not surprising that many talk about how the amount of their debt makes them sick. You don't have to feel sick about your debt because it is possible to increase the health of your personal finances.

Step 1. Take the “temperature” of your personal finances and figure out your financial health by checking your credit report and score from each of the credit agencies. Your credit score will give you a numerical number for how healthy, or not healthy, your finances are. If your score is not where you want it to be then you know to work on making it better.

Step 2. Correct any errors on your credit report to increase the health of your personal finances. This can be a quick and easy way to boost your score, as errors should be removed. Contact any creditor that you need to and ask that they correct the information on your account. If they choose not to correct the information, you may add a note to your credit report disputing their information.

Step 3. Pay down your debt increase the health of your personal finances. Try to keep your balances below 20% of the total amount you can borrow. For instance, if your total credit limit is $1000, then try to keep the amount you have charged onto your credit card to under $200.

Step 4. Leave accounts open instead of closing them when you pay them off as closing them can cause your credit score to decrease.  Increase the health of your personal finances by charging a small amount on your credit cards and paying them off fully each month. Not using a card may cause the creditor to close your account which could negatively affect the health of your personal finance.

Step 5. Take on only the amount of debt you can afford to in order to improve the health of your personal finances. Taking on more debt than you can pay off can cause you to get behind on your payments, cause collections, even foreclosures or bankruptcies, all of which will have a negative impact on your credit score and the health of your personal finances.

Comments (3)

Joan Haines said:

	... It's important to know how healthy your finances are. Fine tips here.
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May 04, 2010
Votes: +0

Ann Yo said:

	... These are very good tips on how to Increase the Health of Your Personal Finances. Thanks for sharing, 5* plus recommendation!
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May 19, 2010
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walkaboutangel said:

	... Afraid my finances are a little anemic...lol Wishing you a wonderful, magical day, Angel
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August 25, 2010
Votes: +1