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How to Improve Your Credit Score

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If you are in need of a new car, truck, or SUV, a less-than-ideal credit score can make it a challenge to be approved for an auto loan. However, there are ways to raise your credit score ahead of time and increase the likelihood that you receive the financing plan that works with your budget. The finance team at Honda of Watertown near Waterbury is here to show you how to boost your credit score to get the interest rate you want on a new car. Check out the following tips to increase your credit score, and then get pre-approved by applying for financing with us online today!

Check Your Credit Reports

Missing a payment, mistaken information on your credit report, and even identity theft can all affect your credit score. You may be asking: “How do I boost my credit score?” When looking for ways to raise a credit score, the first thing you should do is make sure that the information in your credit reports is correct. Request a report at AnnualCreditReport.com from one or all three of the major credit bureaus: Experian, Equifax, and TransUnion. Through the Fair Credit Reporting Act, you are entitled to receive one free copy of your credit report a year.

Assess Your Debts

It is extremely important to find out exactly how much debt you have . This will give you a clear picture of where you stand, while helping you decide if your budget is such that you can take on a new auto loan. There are two important credit score factors that you need to take note of.

  • Your debt-to-credit ratio: This represents how much available credit you have vs. how much you have actually charged. It is recommended that you keep your credit card charges under 30% of the available balance every month.
  • Number of cards with balances: The more cards you have that show a balance will help to lower your score.

Create a Payment Plan

Once you have determined what your current debts are, work on creating a payment plan that includes:

  • Dealing with debts in collections
  • Eliminating small balances on cards
  • Working to pay down larger debts

Open a Credit Card

Applying for a card can help establish credit, and as long as you keep spending under the 30% balance and pay your bill on time every month, you’ll raise your credit score. One easy way to increase your credit score is to pick one recurring monthly charge and have it paid with your credit card. Just make sure you have set the money aside to pay the balance off when the bill arrives.

If you don’t qualify for a regular credit card, try taking out a secured credit card. This type of card has a smaller limit and usually requires an initial deposit of up to a couple hundred dollars to open. Even with a secured credit card, if you keep up to date with your payments you will continue to build credit.

Build a Credit Age

“How can I boost my credit score?” Your credit score is built over time. If you are unable to be approved for a car, becoming a user on a family member’s account is another way to establish credit. As long as they pay their bills on time, it will provide you with a good credit history. It’s important to make sure that both parties have a clear agreement on who actually gets to use this line of credit and how the payments will be handled.

Minimize New Credit Applications

You need to be careful when applying for new cards or loans. Whenever lenders do a hard inquiry of your credit, it can negatively impact your score for up to a year. Keep this in mind and try to limit the number of credit cards you apply for.

Learn More Ways to Raise Your Credit Score at Honda of Watertown

Honda of Watertown has helped drivers from Southbury to Torrington get the financing they need to get behind the wheel of a new Honda no matter what their credit score may be. We are prepared to help you, too! Use our online payment calculator to determine how much your monthly payments will be, and make sure to explore the benefits of our Upgrade Assurance Program. If you have any questions or would like to learn about the benefits of buy here, pay here financing or liability insurance costs, please feel free to contact us.

Honda of Watertown 41.5699347, -73.0993683.