Tips for building better credit in the new year

Updated: Jan. 1, 2019 at 5:04 PM CST
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MONTGOMERY, AL (WSFA) - William Frazier, owner of Clean Slate Credit, said his motivation for starting a business to help others build their credit stemmed from his own personal struggles with his finances.

“I had my own issues, and I worked at a bank and would see people come in with similar problems,” Frazier said. “Once I figured out to solve my own credit problems, I knew I wanted to start something to help other people.”

Frazier said the beginning of the year is typically a busy time for his business.

“This is usually when I see the most clients,” Frazier said. “They’re trying to do things with their credit and start working on their financial situations to get things better.”

The most common goal for Frazier’s clients in a new year is to purchase a home, a move he said requires a good credit score.

“Everybody wants to do better with money but most times, we do the resolutions and they don’t last too long,” Frazier said.

He said the first step for anyone looking to repair their credit is to figure out their credit status so they can determine what exact fixes they need to make. If you don’t have much credit experience, he said it’s important to create avenues to build credit.

“The first step is, the most obvious thing, get your credit reports,” Frazier said. “You need to get all three of your credit reports. Look through the scores and the reports to see what’s all on there. After that, you need to start addressing those items. See what you need to pay off. See what you need to dispute if there are some inaccuracies. If you need to get credit, get some credit cards so you can start building up credit.”

Frazier said the greatest barrier he sees in his clients is that they become overwhelmed with their financial circumstances.

“They see a whole bunch of stuff and a whole bunch of money that they owe and they don’t know how what to do or how to fix the problem,” Frazier said. “The thing I tell them is just calm down. You have to take it one step at a time and see what you need to do first.”

He said inaction never leads to repaired credit and can often lend itself to more debt. On the other end, he said repairing credit is not an overnight fix and requires discipline when it comes to consumer spending.

“A lot of times when people have credit cards, they max them out and have all of them maxed out,” Frazier said. “They have to get in the habit of paying those down and keeping them down and not taking advantage of the sales that pop up."

Frazier said it’s important to contain spending to what you can either pay for in cash or pay off your card by the deadline. He said the goal should be to keep your debt at 30 percent or less than your credit limit.

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