Credit Scores

5 Tips to Maintain a Healthy Credit Score

If you intend to get a car loan with the best possible interest rates, be sure to always be mindful of your credit score.

By TheCarzingTeam March 5, 2019 | Credit Scores

Credit Scores

Credit rating will always be the basis of any individual’s financial credibility and capacity. The credit score is a snapshot indication of the spending and paying patterns of any individual. If your credit record is tarnished, you will likely lose access to car loans with competitive interest rates.

In the past, it was almost impossible for a person with bad credit score to apply for and obtain auto loans. Fortunately, it is possible to obtain a loan with bad credit, but those loans usually come with very hefty interest rates and fees. Consumers with good credit scores are always prioritized. They get the best car loan products available and they do so with ease.

“Consumers with good credit scores get the best car loan products available and they do so with ease.”

So, how do you earn and maintain a good credit score? It may not be as difficult as you think. Here are some simple strategies that you can implement today.

Pay all your bills on time

Nothing beats settling all your outstanding bills on time if you intend to earn and keep a good credit standing. This is not only applicable to credit card bills and loans. Always pay your utilities on or before the due date. Whenever you make delayed payments, you are incurring negative scores, which will be deducted from your credit score. Not paying your bills at all spells disaster for your credit.

“Whenever you make delayed payments, you are incurring negative scores, which will be deducted from your credit score.”

Keep credit card balances low

Credit cards are financial snake pits. If you use them in making huge and expensive purchases without settling the full amount at once they become especially dangerous. Plastic cards are not free of charge. Aside from the purchases themselves, interest charges and fees quickly add up. It would be ideal to keep your credit card balance low or zero. This way, you avoid the risk of failing to settle your balance on time altogether, which could be a real possibility.

Set your limit on expenses and stick to it

Set a budget for all your monthly expenses. This will help you to avoid spending unnecessarily, and hopefully allow you to avoid using credit entirely. Remember, you want to keep a good credit score. Avoid any way it could otherwise be eroded.

“Set a budget for all your monthly expenses.”

Save money when intending to spend on expensive items

One good way to avoid incurring negative credit score is to avoid using credit cards or getting a loan (due to risks of penalties and defaults). It would be wiser to save money to buy an expensive or costly item. The same goes if you are planning to enjoy any costly activities or vacations. By spending your savings, you avoid unnecessary expenses in interest and other fees.

“By spending your savings, you could avoid unnecessary expenses in interest payments and other fees.”

Avoid getting more or unnecessary credit cards

As mentioned, credit cards could only bring about temptations to overspend. Moreover, getting unnecessary cards could be detrimental to your personal finances. Not only do they encourage risky spending, but they likely collect annual fees and other costs. It would be best to get rid of all your credit cards for good.

Get pre-qualification instead of pre-approval for a car loan

Whenever lenders make hard inquiries on your credit standing, negative scores are incurred and are deducted from your credit score. Get pre-qualified for a car loan instead so you can determine how much it would cost you to buy a car, calculating financing options, and all without negatively impacting your credit score.

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