Ways to Improve Your Credit Score

Is your credit score causing problems when trying to get an auto loan with more favorable terms? There are ways to raise your credit score, which might be easier than you think. When you need help figuring out how to get a better credit score, the team at Victory Mitsubishi is here to help as you explore a great new or used vehicle for sale in Bronx. We would love it if you could take home a vehicle to your Mount Vernon garage.

 Find out ways to raise your credit score today with our list of tips. 

6 Tips to Increase Your Credit Score

Ask yourself, “How to boost my credit score?” We’ve got six tips right here. When you’re done reading and taking action, you’ll see how to get a better credit score.

1. Check Your Credit Reports

Mistakes do happen, and they can impact your credit score. So when you ask, “How to boost my credit score?” or “Ways to raise your credit score,” make sure your credit history reports are as factual as possible. You get one free credit report a year, which you can get from all three major credit bureaus: Experian, Equifax, and TransUnion. The Fair Credit Reporting Act entitles you to this documentation, and you can access it at AnnualCreditReport.com. 

These credit reports do not show your credit score, just your credit history. The two biggest factors in your credit score are payment history (35%) and credit utilization (30%). 

2. Assess Your Debts

List out all of your debts so you can get a handle on what exactly you owe. Two determining credit score factors are:

• Your debt to credit ratio: How much available credit you have vs. how much you have actually charged. Ideally, you want to keep your credit card charges under 30% of the available balance every month. 
• Number of cards with balances: The more cards with balances, the lower your score. 

This is your credit utilization factor, which accounts for 30% of your credit score. If you’ve maxed out all of your credit cards, your credit score is lower.

3. Create a Payment Plan

Attack your debts with a repayment plan that includes tackling debts in collections, eliminating small balances on cards, and working to pay down larger debts. Again, this will lower your credit utilization and help you as you learn how to get a better credit score.

4. Open a Credit Card

Your credit score could also be low because you simply have never had a loan or credit card before. Opening a card in New Rochelle can help establish credit if you keep under the 30% balance and pay your bill on time every month. A simple way to improve your credit score is to pick one recurring monthly charge and have it paid with your credit card, making sure you set the money aside to pay the balance off when the bill arrives. 

This is the payment history factor of your credit score. Lenders will examine your payment history and see you make payments on time and within your budget. 

If you don’t qualify for a regular credit card, consider a secured credit card. This type of card has a small limit and usually requires an initial deposit of up to a couple hundred dollars to open. 

5. Build a Credit Age 

Your credit score happens over time. If you are starting today, one way to add to your history is to become an authorized user on a family member’s account. As long as they have paid their bills on time, that will begin to reflect well on you. Just make sure both parties have a clear agreement on who actually gets to use this line of credit and how payments will be handled with this tip to increase your credit score.

6. Minimize New Credit Applications

While we discussed a new card or loan as one of the ways to improve your credit score, you will want to be judicious in applying for new cards or loans. When lenders do a hard inquiry of your credit, that can impact your score for up to a year. Trying to open new lines of credit is responsible for 10% of your credit score.

Find Out More Ways to Raise Your Credit Score at Victory Mitsubishi

Looking for additional advice on answering, “How to boost my credit score?” For more tips to increase a credit score, contact our Finance Centerat Victory Mitsubishi. Our credit experts can walk you through the process and answer any additional questions in Westchester.