How to Improve Your Credit Score

Auto Financing Paperwork and Money 

You don't need a bad credit score to decide that it could use some improvement-even those who are responsible with money can have a lackluster score. If your credit score is causing headaches when it comes to obtaining a credit card or securing a car loan, the experts in the Honda City Chicago Finance Center are here to help. The tips below should help Cicero-area residents!

 

Improve Your Credit Score by Checking Your Credit Reports

None of the major credit bureaus-Experian, Equifax, and TransUnion-are perfect, which means there may be mistakes on your credit scores. To ensure mistakes aren't affecting your score for the worse, obtain reports from all three and ensure they're factual. Note that the Fair Credit Reporting Act entitles you to one free copy of your report a year.

Increase Your Credit Score by Assessing Your Debts

Create a comprehensive list of all of your debts to ensure you always have complete knowledge of exactly what you owe. Knowing this will give you great control over credit score factors, such as:

  • Your debt to credit ratio: This represents the amount of overall credit you have vs. the amount you have charged/you are using. The rule of thumb Oak Lawn residents want to keep in mind is that you should be utilizing less than 30% of your overall total credit.
  • Number of cards with balances: If you have more cards than you can count, your credit score is likely suffering. Generally, the fewer cards you have, the better your score will be-especially if those balances are high.

Create a Payment Plan to Improve Your Credit Score

A plan of action will help you tackle debt and reduce some credit card anxiety. (Breathe!) This plan should approach your debt from multiple angles, from eliminating small balances on cards to tackling debts in collections and working to pay down large debts.

Open a Credit Card to Improve Your Credit Score

Your credit card score might be low simply because you don't have much credit in the first place. If you've never had a loan or credit card, you can open a credit card to start building a credit history. Only do so with good credit habits in mind-as previously mentioned, keep your balances under 30% of your total credit. Also, make sure you're able to pay your bills on time every month.

For those not having any luck obtaining credit, try obtaining a secured credit card. Secured cards can help build credit, too, though they have small limits and sometimes require users to deposit some money to open an account.

How to Build a Credit Age

Rome wasn't built in a day, and neither is a credit score. Understand that the longer you have good credit, the better your score will be. With that said, if you can be added to a responsible family member's account-one that is in good standing and already has a good history-you'll have a head start when it comes to building a solid credit history. Just ensure the nitty-gritty is discussed with this family member before opening an account.

Don't Apply to Too Many Credit Cards

Obtaining new credit can often improve a credit score, but this is best done with care. If you're applying for new cards en masse, it will likely count against your credit score. Choose which credit cards to apply for carefully, only putting in applications for cards you understand completely and believe you can obtain.

Find More Ways to Raise Your Credit at Honda City Chicago

Honda City Chicago is always happy to answer any remaining questions for Oak Park-area residents. Whether you're wondering if there are more ways to raise your credit score, how refinancing a previous auto loan works, if you should refinance or trade in your old car, or any other finance-related questions, Honda City Chicago is here to help-all you need to do is ask!