If it’s time for you to think about buying a new or used car, then you also need to start thinking about getting your credit score up. The higher the credit score, the lower the interest rate you will be able to get, in most cases.
No matter what your credit score currently is, or what marks you have on your credit history, here are some tips that will help you increase your credit score fast.
Pay Off All Credit Cards
Pay off your credit cards about 6 weeks before you go in to a lender to ask for a loan. When a lender pulls up your credit report, the lender will be able to see exactly how much money you owe on your credit cards. This amount of money will help the lender to determine whether or not he or she wishes to assume a risk by offering you a loan. Therefore, if you have a large balance on your credit cards, a lender may be reluctant to offer you a loan. However, if you can show a zero balance, you may be more appealing to a lender.
Close Unused Credit Cards
Many people have taken out credit cards that they no longer use. For example, if you have ever taken out a credit card for a store, such as a clothing store, and are not using it, then the inactive card will show up on your credit history. It’s best to have as few open accounts as possible, especially if they are inactive, but open, accounts.
Use Credit Cards
By using credit cards, lenders will be able to see that you have a credit history. Of course, it’s best if you can pay these credit cards off on a regular basis so that you do not have an outstanding credit balance.
Always Pay Back Loans on Time
There will be a record of loans that you have taken out on your credit history. Therefore, always pay back your loans on time in order to ensure that you do not get a black mark on your record for failure to repay loans. Paying back loans will prove to lenders that you have a history of financial reliability.
No matter what you need to have good credit for, it’s always a good idea to pay back loans, use credit cards, and pay off all debts in a timely manner. Having good credit can mean the difference in several hundred to several thousand dollars when it comes time to purchase a new or used car.