Your credit score plays a vital role in getting approved for any type of credit or loan. It’s meant to tell lenders whether you are a high or low-risk borrower. Having a good or excellent credit score makes it easier for you to qualify for auto loans, credit cards, and more at affordable interest rates. On the contrary, having a low or poor credit score makes it difficult for you to get new loans or new lines of credit. You can get approval, but you might have to pay a very high-interest rate, or your credit limit may be low. To prevent this, you must improve your credit score.

Improving your credit score takes effort and patience. There’s no one-size-fits-all solution that will increase your credit score overnight. Yet each step in the right direction could bring benefits. As you move from bad credit to fair credit to good credit, you can start to save money and take advantage of more opportunities.

Here are some strategies to quickly improve your credit.

  1. Check your credit report. One of the important things that you must do to improve your credit score is to check your credit report from all three of the nationwide consumer reporting agencies. Doing this will help you in identifying errors in your report. If you find mistakes in your report, you must get them rectified immediately. As the credit score is calculated based on the information mentioned in the credit report, you need to ensure that this report is free of errors.
  2. Stay on top of payments. Another best thing you can do to improve your credit score is to pay your debts on time and in full whenever possible. Payment history makes up a significant chunk of your credit score, so it’s important to avoid late payments. If you struggle with on-time payments, consider using automatic payments for your accounts or setting up alerts so you are reminded to pay.
  3. Keep your credit utilization rate low. Credit utilization refers to the portion of your credit limit that you use at any given time. The simplest way to keep your credit utilization in check is to pay your credit card balances in full each month. If you can’t always do that, then a good rule of thumb is to keep your total outstanding balance at 30% or less of your total credit limit. From there, you can work on whittling that down to 10% or less, which is considered ideal for raising your credit score. Another way to improve your credit utilization ratio is by asking your credit card issuer for a credit limit increase.
  4. Keep old accounts open. When trying to increase your score, avoid closing any old accounts that have been paid off, even if you no longer use them. Keeping the accounts open will help maintain the length of your credit history.
  5. Avoid multiple applications. If you’ve been turned down for credit, you should avoid applying for further credit or borrowing immediately. Multiple applications in a short period can hurt your credit score. This can be a sign of financial desperation.
  6. Use different types of credit. Your score may be lower if you only have one type of credit product, such as a credit card. It’s better to have a mix of different types of credit, such as a credit card, a car loan, and a line of credit. A mix of credit products may improve your credit score. Make sure you can pay back any money you borrow. Otherwise, you could end up hurting your score by taking on too much debt.
  7. Become an authorized user. If a relative or friend has a credit card account with a high credit limit and a good history of on-time payments, ask to be added as an authorized user. That adds the account to your credit reports, so its credit limit can help your utilization. Authorized user status allows you to benefit from the primary user’s positive payment history. The account holder doesn’t have to let you use the card or even give you the account number for your credit to improve. Make sure the account reports to all three major credit bureaus to get the best effect; most credit cards do.
  8. Consider getting a credit builder card. If you’re looking to improve your credit rating, then a credit builder card can help rebuild your credit score. They typically have low spending limits and high-interest rates. When you first get a credit card, it might briefly cause your score to drop. But used well, it can help you build your score over time. Credit builder cards can be effective if you use them for a small amount of spending each month. Then make sure you repay the card on time and in full each month to avoid paying interest.
  9. Consider a debt consolidation plan. If you have several outstanding debts, it could be to your advantage to take out a debt consolidation loan from a bank or credit union and pay off all of them. Then you’ll just have one payment to deal with, and if you’re able to get a lower interest rate on the loan, you’ll be in a position to pay down your debt faster. That can improve your credit utilization ratio and, in turn, your credit score. A similar tactic is to consolidate multiple credit card balances by paying them off with a balance transfer credit card. Such cards often have a promotional period when they charge 0% interest on your balance. But beware of balance transfer fees, which can cost you 3% to 5% of the amount of your transfer.
  10. Be patient. You won’t drastically improve your credit score overnight. The best way to achieve an excellent score is to develop good long-term credit habits. Establish good habits, like paying your balances on time, keeping a low utilization rate, and applying for credit only when you need it, and you should see those practices reflected in your score over time.

Dedicated Credit Rebuiding Team

Edmonton Auto Loans offer consulting services to help you improve your credit. Our professional team will be very glad to help you get your credit back on track. Contact us here anytime to book a consultation or apply for financing. We can are your best option for your vehicle financing needs as well as it is what we specialize in. If you urgently need a vehicle, then simply click here to start your application. We accept all types of credit; so, you have nothing to worry about.

More questions about rebuilding your credit? Call 1-855-227-1669 or message us here

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