How to Improve Your Credit Score


You’ve decided to purchase a used car. That’s great. Most people rely on credit and loans if they want to buy a vehicle, and you probably won’t be any different. After all, cars can be expensive and there aren’t many people that can pay the entire vehicle cost up front. So, before you start looking for a vehicle, you should take a good look at your financial situation. If you’re credit score is not good, and you’re obviously not able to buy a car outright, you also may not be able to get the needed car loan to finance your purchase.


Even if you are currently in a financial position where you can make reasonable monthly payments, many lenders will simply look at your credit score to decide whether to approve you for a car loan. If you haven’t been good at managing your finances in the past (paying bills late, being in debt or taking out loans that you couldn’t pay back), the lenders may feel you will have a hard time managing your finances in the future. To help you out, here are a couple of ways to improve your credit score.


Get A Professional Credit Report

The first thing you’re going to need is a professional credit report so you can see exactly what your current score is. You might find that you already have a good, or at least fair, credit score, and that might be all you need to successfully get approved for a car loan. However, if you credit score comes up with a poor or bad indication, then you can at least see what has caused it and determine how you can improve it yourself, or maybe get some assistance from professionals.


There are three major credit report companies out there, TransUnion, Equifax, and Experian, and you are entitled by law to get a free credit report every 12 months from each of them. Pick one, or get a report from each and compare them. The first thing you want to look for are errors. It is quite possible that sometime in the past one of your creditors accidently posted an incorrect to one of the credit agencies, or a negative report that long been rectified still shows up. These are thing that can be taken care of by sending a letter to the agency, or agencies, explaining the situation and provided documentation to support your claim. You may have to go back to the original credit to get the proof, but it will be worth the time and effort to get your report corrected.


Payment Reminders Can Help Keep Your Record Clean

We’re all forgetful, which is why we have alarms to wake us up in the morning and kitchen timers to ensure we don’t burn our cooking. Since we rely on timers for everyday things, why not rely on alerts to remind you to pay your bills? If you find yourself constantly paying your bills late, then one of the easiest remedies is to set up payment reminders on your cell phone.


Lenders like seeing someone that has paid their bills on time. It goes a long way to improving your credit score and it helps when you actually apply for a loan. Whether it’s paying the rent, utility bills or paying off credit card balances, set up reminders so you’re never late on any of them. There are many free smartphone apps that can help remind you when you need to pay, and you can also sign up to have some of your creditors notify you a few days before a payment is required. If you have late payments, then make sure they don’t impact you for too long by quickly dealing with them. Stay on top of your finances and ensure that your past credit problems don’t creep back, because it can have a massive negative effect on your chances of borrowing money for anything.


Keep Credit Balances Low

Another good tip is to keep credit balances low. Sure, credit is made to be used, but if you’re constantly using credit cards and your balances are always at the upper limit, lenders might feel like you’re trying to live a lifestyle you can’t afford. Be modest with your uses of credit. Keep the balances low and try to pay them off as soon as possible. However, if you have the cash available for a particular item, you might still put it on a credit card as long as you use that money to pay it off as soon as the bill comes in.


High amounts of credit can also contribute to delayed payments if you’re not careful. Manage your money responsibly by juggling the cards you have and using them in the correct places. Fixing your credit score is a lot about your attitude towards spending, so if you find that you have a bad habit of buying random items that you don’t need, try and keep your expenses to a minimum and thus keeping your credit balances low.


Consider Getting a Pre-Paid or a Bad-Credit Credit Card

If you’re having a hard time maintaining a good credit history, consider getting a Pre-Paid credit card. These are made for the main purpose of not building up credit card balances, and can be a good means to improving one’s credit score. Even if you don’t have a bank account, most banks make these cards available to anyone.


Another option is Bad-Credit credit cards that many credit cards companies offer. The credit limits on these cards are relatively low so they’re worth using for everyday purchases, which will enable you to slowly improve your credit rating by demonstrating you are now able to handle your finances. It’s worth mentioning that bad-credit cards typically have higher interest rates than regular credit cards, which makes it important to pay off the balance every month.


If your existing credit balances are so high that you are unable to even make all the minimum amounts, you may be looking to use one of the many credit repair companies that constantly run radio and television ads. In many instances you may be able to do yourself the same things they would do for you, without having to pay the fees they charge. The FTC (Federal Trade Commission) offers some very good advice and information on what you can do yourself, and how to find legitimate, non-profit credit counselors if you are unable to do it yourself.


Some Final Words

Following these methods can get you on track to improving your credit score, but please understand it will not happen overnight. While that may be fine for those who don’t need a loan to make a large purchase right now, what about those that do need to buy a new car immediately? Does your vehicle need costly repairs that you can’t afford, or has it been totaled in an accident and the insurance payment isn’t nearly enough to buy an adequate replacement? Citi Auto Group can be your answer.


At Citi Auto Group, our professional staff will help you pick the right vehicle from our large inventory, with the right price, and financing to make that happen. No matter what your financial situation, we can get you approved for a car loan that you can afford. In addition to our strong relationships with some of the biggest auto lenders, we can help you find bad-credit loans, and can also offer a Buy Here Pay Here option.