Prior to applying for auto loans or mortgage loans, you should always work to improve your credit. Having the best possible credit score can help you to secure a loan with lower interest rates and better terms. While most people know that paying credit cards on time is the best way to increase their score, this takes time. Here are a few of the lesser-known and faster ways that you can work to improve your credit score.
Dispute Anything Incorrect on Your Credit Report
One of the fastest ways to boost your credit score is to simply pull your credit score and dispute anything on the report that is incorrect. There may be late payments listed or accounts in collections that you do not recognize. Disputing incorrect information can help you to get this information removed. It can take up to 60 days to remove disputed information from your credit report, as the reporting company does have the opportunity to provide proof that the information is valid, so always take a look at your report 60 to 90 days before applying for a loan.
Open Up a New Card to Counteract Your Credit Utilization Ratio
The ratio of your credit usage to your available credit should be around 30 percent. This means that if you have $10,000 available in credit, you should not utilize more than $3,000 in revolving debt. Paying down the debt can help to reduce your credit utilization ratio, but not everyone has that much money lying around. In some cases, opening up a new, high-limit card and not using it can help to balance out your credit usage ratio, boosting your score.
Get Added as a Co-Signer to a Trusted Family Member's Credit Card
The final tip to help you to improve your credit score is to get added as a co-signer on a trusted family member's credit card. Preferably, this should be a card that has a long credit history and a high limit. This is a great way for someone without credit history or someone who has not had a long credit history to establish their credit and boost their score. However, if the card does not get paid off, it can negatively affect your credit, so be sure it is someone you trust to pay their credit cards.
If you are looking to apply for auto loans or mortgage loans, taking the time to review your credit report and disputing anything wrong on the report, paying down or opening up a new credit card to lower your credit utilization ratio, or getting added to a high, long-standing credit card can help to boost your score quickly. Once your score is improved, work with a lender like Texas Bay Credit Union to apply for an auto loan or mortgage loan.Share