Ways to Improve Your Credit Score

Are you worried about your credit score ahead of trying to secure an auto loan for your new or used vehicle purchase? There are ways to raise a credit score in Lafayette to put you in a better financial position as you try to get the best possible loan for your situation. It's not as difficult as you might think. It takes a proactive approach and some research before applying for financing near Lafayette.

Our tips to increase a credit score can help you get a lower interest rate, which lowers your overall costs of getting an auto loan while reducing your monthly payment. Read on for some pointers on how to get a better credit score with our finance team at Lafayette Lincoln near Frankfort. 

How to Boost My Credit Score: Credit History Report

Examining your credit history report before applying for financing for a significant purchase like a new or used vehicle is essential. So, when you ask "how to boost my credit score" or "ways to raise your credit score," make sure your credit history reports are as accurate as possible. You are entitled to one free annual credit history report from all three major credit bureaus: Experian, Equifax, and TransUnion. Access that report at AnnualCreditReport.com. If you see any errors or see a way to reduce your debt-to-income ratio, take care of those as soon as you can.

How to Boost My Credit Score: Assessing Debts

List out all of your debts to get a handle on what you owe. Two determining credit score factors are:

• Your debt-to-income ratio: How much available disposable income you have (beyond your monthly expenses) vs. how much you currently owe monthly is the debt-to-income ratio. Ideally, you want to keep your debt-to-income ratio at around 30 to 35 percent, excluding your mortgage or rent payment for your dwelling.
• Number of credit cards with balances: The more credit cards with balances, the lower your credit score will be. Paying off some of these balances will help improve your credit score.

How to Get a Better Credit Score: Create a Payment Plan

Lower your debts with a repayment plan that includes lowering or eliminating debts in collections, eliminating small balances on credit cards, and working to pay down larger debts such as your mortgage.

How to Get a Better Credit Score: Open a Credit Card

Your credit score could also be low because you have never had a loan or credit card. If you have no credit history, opening a card in your name at your West Lafayette address can help establish credit if you keep it under 30% of the maximum balance and pay it off monthly. A simple way to improve your credit score is to pick one recurring monthly charge and pay it with your credit card, ensuring you set the money aside to pay the balance off when the bill arrives. 

Consider a secured credit card if you don't qualify for a regular credit card. This type of card has a small limit and usually requires an initial deposit of up to a couple hundred dollars to open. Consult your credit union or bank to see if this works for you.

Tips to Increase a Credit Score: Build a Credit Age 

Your credit score is built over time. If you have no credit history and you're starting out fresh today, one way to improve or add to your history is to become a user on a family member's credit card account. As long as they have paid their bills on time, that will begin to reflect well on you as you build a credit history. Just make sure both parties clearly agree on who gets to use this line of credit and how payments will be handled. 

Tips to Increase a Credit Score: Minimize New Credit Applications

Don't just apply for credit or loans everywhere. Be choosy when applying for new cards or loans. When lenders perform a deep dive into your credit history or credit score, that can impact your score for up to a year.

Find Out More Ways to Raise a Credit Score at Lafayette Lincoln.

We hope you have enjoyed our tips on increasing your credit score. If you need additional advice or help on how to get a better credit score, contact us or call us to talk to a member of our finance team. We're happy to help in any way we can from our Lafayette dealership!