You’re in need of a new car, but your credit isn’t the best. Is there anything that can be done?
Your credit score is an important tool used by lenders to decide whether or not they’ll give you financing, so with a low credit score, it’s tough to buy a car or make big purchases.
However, don’t stress—there are actually a number of things you can do to boost your credit score overnight, increasing your chances of getting a loan.
To learn more, keep reading to find five tips that can help you improve your credit score, even if it’s not the best.
Ask for Higher Credit Limits
While it may seem counterintuitive, you can often improve credit scores by asking your credit card companies for higher credit limits. How does this work?
If you have a credit card with a $1,000 limit, but you’ve maxed it out, then you’ve used all of your credit. However, if you raise it to $2,000, you’ve now only used half.
This improves something known as your credit utilization rate, which is a good thing.
However, the trick is not to spend any more money on the card, or this will negate the benefits. This is also not a good option for anyone who has problems with overspending or impulse control, as you don’t want to give yourself the temptation of spending more.
Check Your Credit Report
If you’re wondering how to build up credit, you first want to learn exactly what your credit status is. To do this, you’ll need to see your credit reports, which will tell you your credit score.
The Fair Credit Reporting Act (FCRA) requires each of the three major credit reporting companies to provide you with a free copy of your report every twelve months. The three companies are TransUnion, Equifax, and Experian.
Your report will provide plenty of information on your credit history, whether you pay your bills on time, and whether you’ve ever filed for bankruptcy. It can be useful to request copies of your report before making a big purchase that you’ll need to finance, making sure everything is correct.
Read over your report carefully, looking for any errors. If anything looks wrong, contact the company right away, as they could have made an error or you could have been a victim of identity fraud without knowing it.
Pay Your Bills on Time Each Month
One of the most important ways to boost your credit score is to pay bills on time each month. As soon as that new bill lands on your doorstep, don’t ignore it—pay it as soon as you can.
If you need to make a large payment, use your card, but then pay it off right away. This looks good on your credit score and also gives you peace of mind that the item is already paid off.
You might be struggling financially, but if you can pay even a tiny bit more than the minimum amount due, this will help you get your credit card paid off faster. Minimum payments usually don’t cover much more than interest, but you want to decrease the amount you owe each month.
Avoid Opening New Accounts
Imagine you’re at a department store, making a purchase, and the sales staff ask if you’d like to open a store credit card to save on your purchase. It seems like a tempting offer, leading to easy discounts.
However, you don’t want to open credit cards that you don’t really need. Plus, opening multiple accounts quickly can be a red flag, as it looks like you did lots of shopping in a short period of time.
If you’re having a hard time with credit cards, based on past decisions you’ve made, you might want to work with a credit restoration company to get assistance.
If you already have store accounts that are paid off, it’s fine to keep the cards open, as this can look good on your credit score. Just don’t use them!
Choose a Secured Credit Card
Credit cards give us a big temptation to spend money we don’t actually have. One way to avoid this, while also boosting your credit score, is by using a secured credit card.
This is a card that is backed by a cash deposit in your bank account. This provides reassurance to banks, since they know you’re only spending money you can afford to spend.
The money in the bank is a type of security deposit against your card, similar to a deposit put down when renting an apartment. A secured credit card can help boost your credit score, so considering opening one.
If your credit has been damaged over time, they can help you rebuild it safely.
Boost Your Credit Score Overnight With These Easy Tips
If you need to boost your credit score overnight, these tips are sure to help. Once you understand how credit works and what your credit score means, you can try out the tips above.
Over time, you’ll see your credit score start to improve. This is fantastic if you’re planning to apply for a mortgage or buy a car, as the better your credit score, the easier time you’ll have of getting a loan.
Then, stay smart and make wise decisions, so that you always have a healthy relationship with money and credit cards.
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