How to Get a Better Credit Score

Your credit score is one of the most important factors when applying for a new car loan. So, it’s only natural that if you know your credit score is low, you want to learn how to get a better credit score. For surefire tips on how to boost your credit score, keep it with us at the Holiday Automotive finance center! Below, you’ll read about time-tested ways to raise a credit score. If, however, you still have questions after reading, you’re more than welcome to call 866-807-8084 or contact us online.

Step 1: Check Your Credit Reports

Assuming you don’t have a major issue with your identity that is impacting your credit such as identity theft, it’s normal for credit scores to vary. If, for example, you forget to pay a couple bills, your credit score can drop. If you consistently avoid paying back debts, your credit score can sink significantly.

Before searching the web for queries like “how to boost my credit score” or “ways to raise credit score,” be sure you know what your credit score actually is, as reported by all three major credit bureaus (Experian, Equifax, and TransUnion). Did you know that the Fair Credit Reporting Act entitles you one free copy a year that you can access at AnnualCreditReport.com? Get yours today so you can know where you stand.

Step 2: Assess Your Debts

Figure out what your outstanding debts are so you know how much you’ll have to pay back. Here are two important aspects to consider when assessing your debts:

• Your debt to credit ratio: By definition, this is 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 you have with balances, the lower your credit score.

Step 3: Create a Payment Plan

Planning is the enemy of the type of forgetfulness that can cause your credit score to dip lower than you want. Accordingly, if you create a plan to tackle debts in collections, chip away at credit card balances, and work down larger debts, you’ll position yourself much better to improve your credit score systematically.

Step 4: Open a (Secure) Credit Card

If you’ve never had a credit card before, that could be why your credit score is relatively low. In that case, you need to start establishing credit by opening a credit card. There are plenty of financial institutions in Oshkosh and Ripon where you can open up a credit card. Just be sure to keep the balance under 30% of your credit limit and pay your bill on time monthly. You can even set your card to autopay to help with this. Another tip is to set up a recurring automatic payment to a bill that’s due monthly that then gets paid automatically out of your bank account.

If you think you may not qualify for a regular credit card, consider a secured credit card to build your credit back up. This type of card has a small limit and usually requires an initial deposit of up to a couple hundred dollars to open. 

Step 5: Build a Credit Age

Credit takes time to build. Start building it today and you’ll be better off tomorrow. You can become a user on a family member’s account, too, if they have good credit and are willing to help you out. 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.

Step 6: Minimize New Credit Applications

Avoid applying for new credit applications after opening a card up. While one or two accounts can help you build credit slowly, too many applications at once will invariably cause your score to dip lower.

Find Out More Ways to Raise Your Credit Score at Holiday Automotive

Looking for additional tips and tricks to increase your credit score in Beaver Dam or West Bend? Here at Holiday Automotive near Sheboygan, we can help! Give us a call at 866-807-8084 anytime. Did you know that taking out a car loan and paying on time can also help you raise your credit score? It’s true! Visit us today to learn more.