How to Improve Your Credit Score

person doing finances

Making sure that you have a good credit score is the best way to ensure that you can secure a credit card or a low interest rate on a car loan in the Lubbock area. But what if your credit score is less than ideal? The finance team at Brown Honda of San Angelo has some helpful tips on how to raise your credit score.

Improving Your Credit Score: Check Your Credit Reports

Are you wondering how to boost my credit score? The first thing to do when looking for ways to raise your credit score is to make sure that the information contained in your credit report is correct. Along with issues such as identity theft, you may find that there could be some mistakes in your report. Our finance experts recommend that you request your credit report from all three major credit bureaus: Experian, Equifax, and TransUnion. Through the Fair Credit Reporting Act, you are entitled to one free copy a year that can be accessed at AnnualCreditReport.com.

Improving Your Credit Score: Assess Your Debts

Make a list of all your debts so you can see exactly what you owe. The two factors that determine what your credit score will be are:

  • Your debt to credit ratio: How much credit you currently have available vs. how much you have actually charged. We advise that you keep your credit card charges under 30% of the available balance every month.
  • Number of cards with balances: Having several credit cards that are carrying a balance will help to lower your credit score.

Improving Your Credit Score: Create a Payment Plan

A straightforward way to improve your credit score is to create a repayment plan that includes managing debts in collections, eliminating small balances on cards, and working to pay down larger debts.

Improving Your Credit Score: Open a Credit Card

You may have a low credit score simply because you have never had a loan or a credit card before. Securing a card can help establish credit, as long as you keep under the 30% balance and pay your bill on time every month. A smart way to build your credit score in the Midland area is to pay one recurring monthly charge with your credit card. Then make sure you set the money aside to pay off the balance when the bill arrives. If you discover that you don’t qualify for a regular credit card, consider a secured credit card. A secured card has a smaller limit and you will usually be required to make an initial deposit of up to a couple hundred dollars before you can use the card.

Improving Your Credit Score: Build a Credit Age

Another way to improve or add to your credit history is to become a user on a family member’s account. As long as payments are made on time, you will begin to build a good credit history. It is important to make sure both parties have a clear understanding on who actually gets to use this line of credit and how payments will be handled.

Credit Cards and Bills

Improving Your Credit Score: Minimize New Credit Applications

Getting a new card or loan, and keeping up to date on payments, is one of the ways to improve your credit score. However, since lenders conduct a hard inquiry of your credit, which can wind up negatively impacting your score for up to a year, you will want to be careful whenever you apply for new cards or a loan.

Learn More About How to Raise Your Credit Score at Brown Honda of San Angelo

The path to a stellar credit score doesn’t have to be a daunting one. Brown Honda of San Angelo is happy to offer additional financing tips to help you navigate the process. Our finance specialists can explain your lease or finance options and assist you in securing the terms and rates that are the best fit with your budget. Use our payment calculator to determine what your monthly payments in the Odessa area will be, and then apply for financing with us online. Take a look at more helpful guides with our breakdown of how to trade-in your used car to our dealership. Please reach out if you have any questions or would like more information.

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