Try this: You can request one free copy from each of the credit reporting bureaus, Experian, TransUnion and Equifax, every year. Why bother? Errors on your report, such as a payment marked late that came in on time, could raise your interest rates, lower your credit score and affect your ability to obtain credit in the future.
If you do find mistakes, send a correction letter to each of the credit bureaus that shows the error or submit the dispute online to Experian, TransUnion and/or Equifax.
Don't bother with so-called credit repair clinics who will charge you hundreds or thousands to fix your credit record. "Anything you can legally do to repair it you can legally do for free," says Cunningham.
Of course, if you're not willing or dedicated enough to write those letters and follow up with the credit reporting agencies, paying someone else to do it for you may not be such a bad idea. Better to have someone dispute the errors rather than no one. But be extremely careful in selecting such an organization. Try to get referrals and seek out others who have been satisfied with the service.
Bad Habit No. 3: Failing to alert creditors about a financial hardship
You heard the rumor. Layoffs are coming to a department near you next week. Don't wait until it happens to worry about how to pay your bills. Do some damage control right away.
Try this: "The best time to negotiate is before the problem spirals downhill," says Cunningham. Call the credit card company and explain the problem you're about to have. Ask if they could temporarily lower your interest rate or extend your payment deadline. Issuers sometimes have in-house help programs that provide such short-term services to customers.
Bad Habit No. 4: Thinking of 'budget' as a dirty word
The word may call to mind tedious self-trickery meant for those with low incomes, but everyone could benefit from deciding on certain amounts for spending and sticking to the amount no matter what. It also makes sense to budget for known future expenses, such as quarterly insurance premiums, college textbooks and rent. Not saving up in advance means you'll have to charge expenses or cut into funds set aside for necessities. Budget these fixed costs while you can handle small financial pinches.
Try this: To find out what's draining your finances, keep track of where your money goes for a month. Use a spreadsheet, financial software, or a pen and paper and categorize your expenses. Doing this will reveal whether you're spending too much on expenses you could trim, such as restaurant outings and gas. Then you can consider cooking at home more often or consolidating driving trips. Cut back as necessary without cutting out expenses important to you. Cunningham suggests that if you enjoy watching TV, but don't tune into a majority of the 300 plus channels you have, consider cutting back on your cable package instead of cutting out TV altogether.
For a detailed household spending plan, try our home budget work sheet. Or, get help creating a budget with our budget calculator. Plan for future costs by figuring up the total amount you'll owe and divide by the number of months you have until that day, says Cunningham. If you have money due next month, divide by the number of weeks you have and save that amount every week.