Credit Scores

4 Things to Do to Repair Your Credit Score

Here are four things you can do to help rebuild or repair your credit score.

By TheCarzingTeam May 25, 2018 | Credit Scores

Credit Scores

Want to apply for a car loan but don’t have the best credit score? Don’t worry! Depending on your score, you can still qualify for some car loans, albeit at higher interest rates. You can always check your car loan rates by pre-qualifying on Carzing—it takes less than 1 minute and doesn’t hurt your credit score!

While you may be approved for a car loan with your current credit score, it’s always best to repair or rebuild your credit score before applying for new loans.  You can start by requesting for a copy of your credit report to check if all items listed there are accurate. If not, you can immediately ask for a correction, which is not a tedious and difficult process. You may have to back your claims by submitting receipts and other helpful documents.

“It’s always best to repair or rebuild your credit score before applying for a new car loan.”

If the report is accurate and you still have a low credit score, you should immediately aim to repair it. Yes, it is possible! You just have to set your mind to it. Here are four things you can do to help rebuild or repair your credit score:

1. Pay existing loans on time.

If you have current loans or credit cards, be sure to make at least the minimum payments on time. If you can’t make your payment on time, be sure to contact your credit card/loan company to let them know. This helps ensure your account doesn’t go to collections. If you are paying down balances with a high-interest rate, it might be more beneficial for you to transfer your debt using a 0% balance transfer offer – many of your current credit cards will have this or similar balance transfer offers.

“If you have current loans or credit cards, be sure to make at least the minimum payments on time.”

2. Keep credit utilization low.

Another important factor for your credit score is your credit utilization rate. You should try to keep this below 30%, meaning that your debt should be less than 30% of what your credit limit is. If you can’t immediately pay down your credit debt below the 30% threshold, you can try a different tactic: If you are in good standing with your credit card company and haven’t had many credit inquiries in the past two years, you can ask for a credit limit increase, which will lower your utilization rate.

3. Ask to become an authorized user on a credit card.

While becoming an authorized user on someone else’s credit card won’t make a significant impact on your credit, it can increase the length of your credit history, helping boost your credit score a bit. Be warned, however: if the person makes late payments or carries a high balance, it will negatively affect your score.

“Becoming an authorized user on someone else’s credit card can increase the length of your credit history.”

4. Get a secured credit card.

While it’s generally not advisable to incur additional loans or debts, opening a secured credit card can help boost your credit score. All the aforementioned rules should be followed, including making payments on-time and keeping your credit utilization low.

Are you ready to repair your credit score? You should not hesitate to start the initiative now. Remember, repairing a bad credit score takes time and won’t happen overnight. If you’d like to get access to better car loan rates, you should start these best practices as soon as possible. The sooner you get started, the sooner you can get a loan for your dream car!

If you’d like help with your car purchase, be sure to contact our team at [email protected].

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