Ways to Improve Your Credit Score

credit cards and bills

At Joe Morgan Honda, our goal is to find you the car you need at a price that fits your budget. Even if past financial trouble has damaged your credit score, we’ll work with you on a payment plan with the lowest possible interest rates. You can get even better rates by raising your credit score before you apply. A “how to boost my credit score” plan will look different for every car-buyer. In the guide below from Joe Morgan Honda, you’ll learn how to get a better credit score before you apply for financing in Cincinnati!

Tips to Increase Credit Scores

Know Your Score

Knowing how to get a better credit score begins with knowing the score. If you haven’t checked your score in the last few months, do so ASAP. Credit scores can fluctuate for many reasons, from identity theft to forgotten past-due debts. A quick check through a major credit bureau won’t impact your credit score, and many banks offer their customers complimentary credit checks.

Understand Your Debts

Next, figure out how each of your debts is impacting your score. One of the fastest ways to raise a credit score is to find out what is dragging your score down the most, and tackle those issues first. List your debts and pay attention to the following factors:

  • Credit age — Debts over five years old will impact your score more, even if the debt amount is small.
  • Debt to credit ratio — This term refers to the ratio of available credit vs. your current amount of debt. Your score will take a big hit if you are using more than 30% of your available credit.
  • Number of cards with balances — Two or three cards, each with a debt to credit ratio of under 30%, is ideal. However, don’t just open lots of accounts to spread out your balance. Too many credit cards may look suspicious to lenders as well.

Create a Payment Plan

Now that you’re familiar with your debt, you need a clear plan for how to get a better credit score. That’s where a “how to boost my credit score” payment plan comes in! You already know what’s holding your credit score down the most, so write up a plan that tackles those issues first.

Open a Credit Card

One of the easiest ways to raise a credit score is simply by using your credit cards regularly. Credit cards are great for your credit score under two conditions: you use them regularly, and the debt-to-credit ratio is under 30%. Even with a low debt-to-credit ratio, an account that sits unused can actually be bad for your score. Close any unused accounts, or start using them regularly. One way to do this is to set up autopay to the credit card on a routine purchase, and then an automatic payment to the credit account.

See More Ways to Raise Credit Scores at Joe Morgan Honda

If you found these tips to increase your credit score helpful, be sure to contact our knowledgeable team for more car-buying expertise! Whether you want to calculate monthly payments for various Honda models, or value your trade-in, we’re here to help. Explore more helpful car-buying tip such as what credit score is needed to finance a car and more. Contact us today to learn more! You can even check out more helpful tips such as how to trade-in a car that you still owe on.

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