How To Boost Your Credit Score | Hamden, CT
If you’re looking for the best deal on a car, boosting your credit score is integral. A strong credit rating will not only ensure you’ll be approved for an auto loan, but it also helps to reduce the interest rate. There are a number of things you can do to improve your credit score, from setting up automatic payments, checking for inaccuracies in your credit reports, and restricting new credit accounts. Here are a few tips to help you get a great rate on your car loan.
How Is Your Credit Rating Calculated?
Your credit score is determined by various credit agencies, and it typically ranges from 300 to 850. This rating is a representation of your creditworthiness, which is, in other words, how likely you are to pay back your loans. Credit-scoring models are based on your payment history, such as whether you pay your bills on time, how much of your total credit is in use, how long you’ve had accounts, and the types of accounts you have, such as mortgages or credit cards.
Paying Bills On Time
This is the best way to improve your credit score, as it shows potential lenders that you’re reliable when it comes to finances. You can boost this score by setting up automatic payments or auto-withdrawal for your bills to ensure you don’t miss payments. Calendar reminders are also helpful if you’re not sure whether you’ll always have enough in your checking account.
Deal With Debt The Right Way
There are several strategies for paying off debt intelligently. To begin, be sure to keep balances low on revolving accounts, such as credit cards, and keep your credit utilization ratio low. In other words, if your credit limit is $10,000, you usually want to borrow no more than 30 percent of that amount, or $3,000. You might also try the “snowball method” if you have quite a lot of debt, which has you start with the smallest amount of debt and then work your way up to the largest amount of debt, regardless of interest rates.
Check Accounts Regularly
You can also dispute false claims if you notice them on your credit report. That means it’s important to check your score regularly, which you can do online through sites such as Credit Karma, Experian.com, or you can get a free report once a year at annualcreditreport.com.
Want to learn more about financing your next vehicle? Contact our finance department at Bob Thomas Ford.