How to Improve Your Credit Score

Is your current credit score preventing you from securing a credit card, home loan, or auto loan? The experts at Ryan Family Dealerships near Minot are here to help! Read on to discover valuable tips to increase your credit score today.

Check Your Credit Reports

If you’ve been asking yourself, “How can I get a better credit score?” and are looking for ways to do so, you’ve come to the right place. One of the best ways to boost your credit score is to regularly monitor your credit report. By obtaining and reviewing copies of your credit report from all three major credit bureaus – Experian, Equifax, and TransUnion – you can learn more about what factors affect your credit score and also ensure your reports are as factual as possible.

The Fair Credit Reporting Act entitles you one free copy of your credit report each year that you can access at AnnualCreditReport.com.

Assess Your Debts

Make a list of all your debts so you can get a handle on what you owe, when you owe, and what your interest rates are. Two important credit score factors are:

• Your debt to credit ratio: How much available credit you have compared to how much you owe. 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 high balances or late payments, the lower your score.

Create a Payment Plan

Repay your debts more efficiently by deciding on a repayment plan that includes tackling debts in collections, eliminating small balances on cards, eliminating debts with higher interest rates, and then working to pay down larger debts.

Open a Credit Card

Your credit score could also be low because you simply have never had a loan or credit card before. Applying for a credit card can help establish a solid credit history, as long as you remain under the 30% balance and pay your bill on time every month. A simple way to improve your credit score using a credit card is to pick one recurring monthly charge, such as a utility bill, pay it with your credit card, and then pay off the credit card balance once the bill arrives.

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

Build a Credit History

Your credit score is built over time. If you are just starting out, one way to improve or 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.

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 credit cards or loans. When lenders do a hard inquiry of your credit, that can end up impacting your score for up to a year.

However, in situations where you are shopping around for a new car or a home, it is expected that multiple inquiries will be made in a shorter period of time. Bulk inquiries of this kind do not reflect poorly on your credit score.

Find Out More Ways to Raise Credit Score at Ryan Family Dealerships

Looking for additional advice or help on how to get a better credit score? Feel free to contact our finance experts near Minot today. If you need a new car now and don’t have time to boost your credit score first, check out our tips on how to finance a car with bad credit. We look forward to walking you through the process and answering any additional questions you might have.