Ways to Improve Your Credit Score

How to Improve your Credit Score

Concerned that your credit score could stand in the way between you and great low-interest rates on your auto loan? Fortunately, there are a few simple steps you can take that will go a long way in raising your score to prime territory. Below, we’ll discuss how to get a better credit score in a few simple steps you can get started on right now!

Get a Recent Credit Report

If you find yourself searching “how to boost my credit score” but are not sure how to proceed, there’s one thing you should do before anything else. It’s important to know where your credit currently stands. If you haven’t checked your credit score in the past 12 months, you can request a free report from each of the national credit reporting companies once per year.

Assess Your Debts

Lenders use your credit report to decide whether they can rely on you to make timely payments on your auto loan. The age and type of debts you hold have a big impact on your score. As you go over your credit report, assess your debts to see where you can make the most effective changes. Several factors that have a proportionally large impact on credit score are:

  • Debt to credit ratio — This refers to your available credit vs. how much you’ve charged on your credit card. Keeping your credit card charges under 30% of your available balance will prevent damage to your credit score.
  • Number of open credit accounts — More balances on different credit cards means a lower credit score, but take care not to go overboard and harm your credit score!

Create a Payment Plan

The best way to tackle your debt is to face it head-on! Focus on debts negatively impacting your score the most, such as those that have moved to collections or any credit card balance over 5 years old. Then stick to your plan and chip away at the debts each month.

Open a Credit Card

It may seem counterintuitive, but holding multiple credit accounts is actually good for your credit score. That is — as long as you maintain a debt-to-credit ratio of no more than 30%. If you have just one account but you’re at 70% of the max balance, your credit score takes a big hit, even if your max credit on that card is very low! Fortunately, opening new accounts on which you keep a low balance is a quick way to improve your score.

Rely on Mercedes-Benz of Modesto for Tips to Increase Credit Score Today

We hope these ways to raise credit score prove useful in your journey toward a prime score and super-low interest rates in Merced! Don’t hesitate to contact our finance center if you have further questions about leasing vs. financing a Mercedes-Benz from our inventory. Be sure to check out our Mercedes-Benz C-Class specials for Stockton drivers, and lease specials on a variety of other models!

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