Improving your credit score is kind of like running a marathon. It’s a process that takes time and consistency.
If you have bad credit, it doesn’t have to stay that way! Get faster credit, better interest rates, and an all-around better score with these 11 credit tips.
Get a Credit Card
If you don’t already have one, it’s time to open a credit card. The first step to building and improving your credit score is to open a line of credit.
Building your credit in a wise way will open many doors for you. You will be eligible for things like car loans and home loans. Use the rest of the tips to help you manage your credit wisely.
Limit Credit Applications
Multiple credit applications in a short period of time is usually a sign of financial distress to credit score companies. Although this isn’t the most important factor in determining your credit score, it can damage your credit score.
Waiting about 6 months in between credit applications is a good rule of thumb.
Take Advantage of Score Boosting Programs
There are programs like Experian BOOST that help you improve your credit score just by paying your bills every month. If your credit score is suffering, don’t look over these programs. Every little bit can help!
Check Credit Reports For Errors
There are three credit report companies, Experian, Equifax, and Transunion. It’s very common for any of the three companies to have errors on your credit report.
Make sure to do your research and make sure that the information they have is accurate. If it’s not, contact those companies and fix it.
Figure Out What’s Hurting Your Score
If you are trying to raise your damaged credit score, identify what is hurting it in the first place.
A few examples could be identity theft or accounts sent to collections.
Build Credit Age
Having a strong credit age is important for your credit score. Score companies want to see that you are a trustworthy credit user. They determine this by your credit use over an extended period of time.
If you haven’t had credit for very long, you can strengthen your credit age by becoming an authorized user for someone who has established credit.
Fix Your Credit Utilization Ratio
If your credit utilization ratio is above 30%, your credit score is suffering. This means your credit balances shouldn’t be more than 30% of your credit allowances every month.
Don’t Close Unused Credit Cards
If you have unused credit cards, your first instinct may be to close them. This can actually hurt your credit score.
Closing a credit card can increase your credit utilization ratio, which hurts your credit.
Make On-Time Payments
Schedule payment reminders so that you can make your payments on time every month! This is huge in boosting your credit score.
Clear Up Collection Accounts
Pay off collection accounts as soon as you can. Transferring debt around will just continue to hurt your score.
Secured Credit Card
Secured credit cards are cards that are “secured” with a deposit into a checking account. This is a very safe way to use credit, and keep yourself in check.
Following these credit tips will help you on your journey to improving your credit score. Remember that consistency and patience is key!
Are you looking for a car loan but not sure if your credit is good enough? Speak with one of our loan specialists today!