Hot Tips to Improve Your Credit Score
Written by DriveAxis.ca August 31, 2022
Interested in buying a car, but lack the credit score necessary to make it happen? You’re not alone. The good news is that revitalizing your credit score is less difficult than many people think, and all it takes is some discipline, and adherence to a few handy tips that will accelerate the process.
Improving your credit score means you can do a lot more than simply buy a new car. It opens up access to an entirely new financial market that can aid you when you wish to take out a loan, buy a house, etc. Once you’ve achieved a good credit score, you can use your car purchase as a means to improve on it even more, and set yourself up for a stable financial future.
FIRST, PAY YOUR BILLS ON TIME
A lot of people mistake bad credit with having too much debt. While that is certainly a factor, it pales in comparison to what happens when you fail to pay your bills on time. Your credit score can take one hit after another if you miss your minimum payments on the assigned due date, which is why it’s important to set yourself up for success by tackling this small goal first.
Make sure you set up a payment schedule where you are paying your minimum amount on time, each and every month. Of course, it isn’t advisable to stick to minimum payments all the time. The objective should be to ward off knocks on your credit rating while you start tackling one bill at a time. This is a two-pronged approach that will go a long way towards upping your score average.
SECOND, DO NOT CUT UP OLD CARDS
Many people have several different credit cards from both banks and independent businesses, and they mistakenly believe that cutting up old cards is a surefire path to a good credit rating. Actually, it can have an adverse effect. While you never want to be maxing out multiple credit cards, that doesn’t mean you shouldn’t keep those cards after they’re paid off.
Your credit score can take a significant hit if watchful eyes notice you slicing up cards and canceling accounts. It means you have less overall credit to your name, which can hamper your efforts. Cut the cards up if you need to, but do not close your accounts. That’s credit attached to your name, and it will show you’ve paid off these cards, while refusing to incur more debt on them.
THIRD, CLEAN UP YOUR CREDIT SCORE
A lot of people don’t realize that their credit score isn’t always accurate, or perfect. Once you’ve received a copy, make sure to check every single account number, payment status and balance in case a mistake has been made. Sometimes an old debt that you paid off years ago can still linger on your credit score due to a clerical error.
If you spot any of these issues on your credit score, take immediate steps to rectify the situation by contacting the credit agency to resolve the issue. That may involve getting documentation from a lender which shows you’ve paid off the balance in question. Once complete, the credit agency will strike that item off your credit score, which will give it an automatic boost.
FOURTH, AVOID CREDIT CHECKS
A huge mistake folks make is applying for yet another new line of credit or loan while still in the proverbial red. Even if your credit score is improving, the problem can still persist. Every time you apply for a new line of credit in any form, the entity in question will perform a hard credit check on your score. This tells creditors that you’re being irresponsible, especially if you already have existing credit that has been maxed out.
By contrast, a soft credit check doesn’t affect your credit score, because it’s usually based on existing credit you already have. They’re also rarely within your purview, and take place automatically in the background. A good rule to live by is - if you request the loan, it gets noticed and flagged. Rather than incur new debt, utilize the credit you have. You may be setting your goals back a bit, but you won’t be doing any immediate new damage to your score.
FIFTH, BUY A CAR
Once you’ve gotten your credit score to the point where it’s back in good standing, buy your vehicle of choice. Make sure to do this only when you are financially able to afford it, and maintain your payments every month. Buying a car is a big signal to credit agencies that you can be trusted with an item of such high monetary value.
Your car payments may be set up on a regimented scheme spread out over a few years, but if you can afford to pay more every month, do so. It doesn’t have to be much, either. Another $50 dollars on top of your monthly payment shows a little extra incentive which can go a long way, and that amount will compound itself month over month, and year over year. If you can pay off your car even a few months before the scheduled final payment date, it looks great on a credit score.
DriveAxis.ca knows the importance of credit vs. buying a new vehicle, and we understand that mistakes do happen, and people can sometimes get themselves in a bit of a jam. That’s why we work with clientele who want to better their credit score, while also attaining that vehicle they’ve wanted for so long. We’ll look at your situation and come up with the best possible long-term plan that will benefit you for years to come.
We’re also stocking our inventory with new vehicles on a regular basis, so if you can’t find something you like right now, that could change in a matter of days. Whatever your situation, DriveAxis.ca will do everything we can to get your credit score into the green, not just for the sake of your vehicle purchase, but all the other major purchases you’ll make in life, as well. Contact us today!