A good credit rating doesn't happen by itself, but it's easier to achieve when you commit to taking control of your finances. Use these tips to manage your credit score, and you'll be on your way to a prosperous new year.

Review your credit report 

Once each year, you're entitled to a free copy of your credit report. If you haven't gotten yours yet, there is no better time than today. Your credit report contains your credit history from the past seven years that affects your credit score. Review it for any inaccuracies and make a note if anything is hurting your credit score — such as late payments or having too much debt. 

If you find any issues with your credit report, the Federal Trade Commission recommends that you contact the credit bureau and the creditor. Also provide them with copies — not the originals — of any documents supporting your position, and keep copies of the letters and other documents for yourself, too. 

Pay down your debts 

Having a lot of debt not only impacts your debt ratio, but the interest you pay could be going toward other things you value. Rather than making just the minimum monthly payments, resolve to start the new year on the right financial foot by paying off your credit cards and other high-interest debts as quickly as possible. When you make a plan, remember these important notes:

• Paying off one card with another won't help your credit utilization ratio.
• Avoid closing out lines of credit in an effort to boost your credit score — doing so may actually have the opposite effect. 

Create monthly payment reminders 

Smartphones have the ability to remind you of just about anything. Why not leverage this technology to alert you when each bill is due? If you do miss a payment, though, contact your creditor immediately. They may be willing to remove a rare late payment from your account.

If you haven't done so already, automate any recurring payments that are always the same amount, like your car payment and mortgage. You can also automate variable withdrawals such as credit card payments, but be sure to change your account setting to withdraw the statement balance on the card as opposed to just the minimum payment. 

Don't over-extend your credit 

If you don't have a credit history, getting a credit card can be a good way of establishing a track record. However, avoid applying for too much credit. Having too many inquiries by creditors on your credit report can raise a red flag for other creditors down the road. If you need to apply for a loan and want to shop around, do it within a short time frame rather than spreading out your applications over several weeks or months.

About TransUnion
At TransUnion, we believe in Information for Good. Whether it’s creating web-based financial products or sharing expert tips, insights and news on our blog, our mission remains the same: putting powerful tools and resources in your hands to help you know your credit, protect your identity and more effectively manage your financial picture.