How to Improve Your Credit Score

July 31st, 2019 by

How to Improve Your Credit Score

Growing up isn’t easy, and sometimes keeping your credit score up isn’t either. Life happens, and we will take hits from time to time.  On top of having a job, a family, and a social life, we have our credit scores to worry about too. There are a few ways to help you maintain a good credit score that aren’t too complicated at all!

Monitoring your payment history is very important and always making your payments on time is too. Make at least the minimum payment (more if you are able) and contact your lender if you think you will have trouble paying a bill. Don’t skip a payment even if you are disputing a bill. Use your credit wisely and don’t go over your limit. Try to use less than 35% of all your available credit.

The length of your credit history with a lender is important too. The longer you have an account open and in use, the better that looks on your credit score. If you do happen to transfer an old account to a new account with a lower interest, the new account will be considered the new credit. Consider keeping the older account active even if you don’t use it. Use it occasionally- keep it active by using it every so often then paying it off responsibly.

Limit your number of credit applications or credit checks. If there are too many, lenders may think that you are urgently trying to get credit or that you are living beyond your means. There are two types of credit checks:

Hard Hits- appear on your credit report and count towards your score.

  • Application for a credit card, mortgage, or loan
  • Some rental applications
  • Some employment applications

Soft Hits- appear on your credit report but only you can see them. These don’t affect your score.

  • requesting your own report
  • businesses asking for your report to update their records about your existing account with them

Although tempting sometimes to get that new TV you want or some new furniture, limit the number of times that you apply for credit. Apply only when you really need it, for large purchases like a new car or a home. Get quotes from different lenders within a 2-week period when shopping for a car so that they are treated as a single inquiry for your credit score.

Use different types of credit such as a credit card, car loan, and or line of credit. Most importantly, don’t take on too much debt. It may seem like a good idea but stay within your budget and don’t get in over your head. A little perseverance and planning will go a long way to maintain and build a good credit score.

If you are in the market for a new vehicle, contact us at Abbotsford Volkswagen and we will help you find the vehicle that fits your budget!

Posted in Finance, General