How Reworking Your Personal Budget Can Boost Your Credit Score'/

There are a few key facts about your credit score that most people already know:

Don’t spend more than you have. If you rack up a bunch of credit card debt and then fail to pay it back, you’re going to hurt your credit score. It’s important to make on-time payments for your credit cards and loans. And, overall, the best way to use a credit card is to pay it back in full each month.

Don’t open multiple lines of credit and then fail to pay it back. This will also hurt your credit score because you’re creating more debt on top of other debt on top of other debt.

These two little tips are pretty much no brainers. And, hopefully, you follow them as closely as you can.

But what about less common tips about how to change the way you manage your debt? What about the unspoken truths behind increasing your credit score?

Today, I want to talk about how reworking your budget — from small tweaks to big-time changes — will improve credit score. And while you may not see significant changes right away, you’ll start to see major benefits over time.

First, stay up to date on the right tools to help you with your online budget, especially if you’re a first-time budgeter. Manilla, the free online and mobile service that lets you manage all of your bills and accounts in one place, is a tool that helps you manage your budget online. Using or the 4+ star customer-rated mobile apps, you can track your spending, check your balances, and always know what you owe (and when you owe it) with Manilla’s email and text bill pay reminders. So you create the budget, and then Manilla will help you stay on track. With Manilla’s bill pay reminders, you’ll never miss a credit card payment, which means you’ll never pay a late fee and it will help you improve your credit score over time.

Reworking your budget alters your mindset. When you sit down to rework your personal finance budget, you’re changing the way you think about money. You’re forcing yourself to be responsible and evaluate the way you spend. This will inevitably stick with you when you’re thinking about your purchases and it will influence what you buy (or don’t). Even if you already like the way you manage your finances, sitting down once a month to rework your budget will help you remind yourself not to get off track, which is the best way to save money.

Additionally, reworking your budget will lead to personal debt reduction. You may find space in your budget for something else. Even if you’re extremely organized when it comes to managing your money, every budget can use a refresh every once in a while. After all, you just might find room in your budget that you didn’t know you had.

For example, as soon as I graduated from graduate school, I created a budget that would allow me to do everything I wanted: pay my rent, pay for my gym membership, pay my utility bills, and start paying off my student loans. I didn’t rework my budget until about a year later, when I realized that I enjoyed running outside more than going to the gym and, therefore, I wasn’t using my membership often enough to justify the cost. I quit the gym and then used the money I was saving to put more toward my student loan payments each month. Doing this helped decrease my principal balance and, over time, it will improve my credit score.

For more tips about how you can improve your personal budget management, check out the Manilla Blog.

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Published November 27, 2012 Updated: February 19, 2016
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