10 Simple Secrets to Improving Your
comes to financial security, credit scores are as important as your bank
balances. Your credit history and score will influence all future credit
purchases, whether it’s buying a car or anything else you need to finance. It will
affect the likelihood of acceptance, as well as the deal you’ll be offered;
therefore, the higher your credit score is the better off you are.
only does a low credit score limit your financing options, it can be quite
difficult to rebuild. However, there’s no need to throw the towel in just yet. We
at Eden Autos put together this list of things you can do to improve a low
credit score. By following these recommendations, you could start climbing the
credit score ladder in no time, giving you greater ability to secure future
loans, not just for cars but for any large purchases.
1. Use Credit Cards Wisely
A low credit score can scare you away from utilizing
your available credit. In reality, showing that you’re capable of borrowing
money in a mature way is a key factor. It will help to pull you out of the hole
and towards a brighter financial future. Credit cards can be the perfect
solution. Using credit in a positive fashion is far better than ignoring it
altogether, especially with credit cards. In an ideal world, however, you
should aim to access only a small percentage of your available credit limit.
Stick to under 30% and the low credit card utilization will ultimately bring
positive results for your score.
your credit limit can help, provided you don’t make it so high that it stops
you from borrowing money in other areas. As for credit card usage, it’s best if
you get into the habit of only using it for one type of purchase. This could
range from gasoline for the car to online purchases. Either way, small monthly amounts
that you can pay off in full are the solution. On a side note, taking this
approach provides far greater benefit because it enables you to avoid late fees
and increased interest rates from late or missed payments.
2. End Store Card Addiction
cards can be very useful tools for improving low scores, it’s important to know
that not all cards are good. Store cards can be a particularly bad idea, not
least because they are often used to purchase items you may not really need.
Besides, it’s very easy to forget about those payments, which would then lead
to greater debts and an even worse credit score.
Even if you
do learn to use store cards in a positive fashion, it’s probably best to steer
clear of them. This is because having too many sources of credit can become a
negative factor that lenders, as well as the credit rating agencies, might hold against you. Moreover, making several
applications for further credit could limit the progress you made in other areas.
There’s nothing wrong with applying for credit, but you’ll want to save it for
more important elements. For this reason, avoiding store accounts is a useful method
for anyone wanting to boost their score. Settle the accounts and stop using
them. Aside from anything else, it’ll be far easier to manage your finances
when future purchases are restricted to credit cards. If you can use those cards
in a responsible manner, though, it’s fine to keep them on your reports.
3. Take A Consolidation Loan
debt with additional debt sounds very counterproductive, however, it’s actually
one of the greatest tricks in the book. Firstly, it will help you regain control
of your financial situation, as it’s far easier to manage one account rather
than several. Better still, it could actively aid your credit score.
having a limited number of accounts can work in your favor. Not only does it mean
you have fewer commitments, it’ll probably mean you have a reduced amount of
available credit. This should also mean there is a far lower level of
temptation connected to irresponsible financial behavior, and the benefits
certainly don’t end there. It’s always worth noting that APR’s are often higher
on smaller loans. Missed payment charges and late fees are likely to cause
major problems for your credit score, as well as your ongoing finances. If
nothing else, a consolidation loan will feel like a major commitment. As such,
this should have a positive influence on your mindset. In truth, this is the
greatest tool at your disposal, and should not be underestimated for a second.
4. Show No Signs of Risk
histories are used primarily to help lenders determine whether an applicant
poses a risk. Therefore, one of the best things you could possibly do is learn
to avoid any activity that may suggest you could be a problematic applicant. If
you have accounts with regular payments, you should try to avoid reducing the
monthly payments. When this happens, it suggests that you may be having
problems meeting your current financial obligations. In turn, this will bring
negative impacts to your credit score, which could mean either slower
rebuilding, or even a decline.
thing to look out for is where you are spending money. If paying for a divorce
lawyer or buying something from a pawnbroker, it pays to use cash. If those types
of payments show up on bank statements, they can indicate possible troubles and
pending changes. It might not necessarily harm the score, but if it hurts your
chances of a loan acceptance, you might to make several applications, which can
cause further harm to your credit worthiness. But if your recent habits indicate
financial maturity, your score should be reflected in a positive light.
5. Verify Yourself
who is looking to rebuild a low credit score, you’ll no doubt want solutions
that are easy and won’t impact your finances. Lenders need to know who they are
lending money to, which is why credit ranking agencies also treat
identification as a vital factor. Without that verification, your score will
suffer. First you should register to vote. Even if you have no intention of
voting for the next president or local candidates, this step is vital because
it verifies who you are, as well as your address. Meanwhile, maintaining
organization goes a long way to helping your cause. This should manifest itself
in ensuring that all accounts indicate your current address. Updating old info
won’t suddenly see your credit score shoot through the roof, however, it can
make a noticeable difference. Apart from anything else, it may help you
discover forgotten accounts and forms of credit. Even if the debts on those
sources amount to just a few dollars, the failure to clear them has probably
been holding you back without you realizing it.
6. Buy with Bad Credit
credit can discourage you from making purchases on credit. Sadly, leaving
yourself short of funds due to buying expensive items on cash often leads to
far greater damage in the long run. Meanwhile, missing out on essential items that
are needed for a comfortable life isn’t a solution either. Buying on credit is
the best answer, but only if you do it in the right manner.
mortgage with a bad credit history is virtually impossible unless you have a
co-signer with excellent credit. Thankfully, access to other major purchases,
including cars, can be far less restrictive. Obviously, with a low credit score,
finding the right deals on significant purchases can be difficult, but when you
do the rewards are huge. With loan options available for people in your
situation, it’s not only possible to make those purchases, perhaps even more
important is that you’ll do so while raising your score. Of course, credit
scores can only start climbing when you make timely payments. With automated
payments and modern banking technology, this should no longer be a problem. Keep
this in mind, and you shouldn’t go wrong.
7. Fight Inaccuracies
harms a credit score quite like factually incorrect information. It can confuse
the credit scoring agencies as to your identity and history. Today, everyone is
entitled to a free credit report every year from each of the three
credit reporting agencies, which is something you must look to utilize. Check
the information to ensure that addresses, credit balances, and other data are
all correct. Mistaken identity can certainly occur, especially if you have a
fairly common name. Unless you want your score to be damaged by someone else’s
activity, taking care of this issue is very important.
to consider revolves around disputes. If a creditor tried to wrongly charge
you, it’s not just a case of proving them wrong to void the fee, you also want
to ensure that any suggestion of broken agreements is removed from your credit
reports. Aside from using the free credit reports to do these things yourself, paid
services are available to evaluate your financial situation and help you
correct inaccuracies and improve bad financial habits.
8. Don’t Hang Around
above, making multiple applications for credit can serve as a caution for
credit scoring agencies. This is because there is a clear indication that you
are considering the idea of borrowing more money. For all they know, this won’t
end with you next purchase. However, the credit rating programs don’t pick up
the applications made within the past 30 days. So, if you are thinking about
applying with several lenders before choosing, do it quick. Submitting multiple
applications over a few months, and your scores could drop.
is to search various internet sites to find who might have the best deals available,
then you’ll only do a single application. Keep in mind the deals you see right
now might not last forever. So, if you think there is a good opportunity to
borrow money in a way that will allow you to repair the score, you should take
9. Limit New Accounts
nothing wrong with opening new lines of credit, especially when it is used for
the right reasons. Nonetheless, opening several new accounts in a short period
of time can backfire, so be careful about new loans and credit cards. The
average age of your accounts is also a factor that counts. You may think that
increasing the available credit without actively borrowing more will work
wonders. While this is true to an extent, going overboard will bring very real
repercussions. With this in mind, needless applications as an attempt to
increase scores are usually a bad idea. Quality over quantity is always
advised. Avoiding the temptation to take the attractive new-customer deal when
you already have a suitable lender can make a big difference.
10. Understand Credit Agreements
purposely sets out to miss payments or encounter issues that will harm their
credit scores. In many cases, the negative impacts can come from a lack of
information rather than responsibility. As they say, knowledge is power, and
understanding your financial agreements is key. You should know that the terms
advertised by lending companies aren’t always the terms you’ll be offered. This
is especially true when you have a less than good credit score. An advertised low
APR is the deal offered to only about 50% of accepted applicants, so you must
accept that the other 50% will be paying a higher rate. That means a person
with a lower credit score will almost always pay a higher interest rate.
agreement without a thorough understanding doesn’t only leave you open to the
potential of a disaster; it also means you are very unlikely to have the best
possible deal you could get. While this might not sound quite as severe, it
does mean that you could harm your immediate and long-term financial future.
This will inevitably hurt your chances of climbing the credit score ladder too.
For the sake of your bank balance as well as your credit history, knowing the
full details of what you’re signing is key. Otherwise, the positive steps taken
above might bring very limited progress.
We hope this
has helped you better understand credit scores, and how you can improve your own
score. If you have questions or would like to talk to one of our professional staff about getting an auto loan, regardless of your credit situation, give us
call or stop in to our dealership. We have a large inventory of pre-owned cars and trucks, with financing options for everyone, and instant pre-approval. Our number is 215-977-4772, and
we’re conveniently located at 6213 E. Roosevelt Blvd.