credit tips

One of the reasons some car shoppers find themselves frustrated when shopping used car lots in Kernersville, NC is credit issues. But you don't have to settle for less just because of past mistakes or other circumstances. Not everyone has an excellent credit rating, and there can be any number of reasons for that. If you're young and just getting out of high school or college, you haven't had time to build a solid credit history yet. If you've hit hard times financially, your credit score may have suffered due to late payments or high credit card balances. Whatever the reason, bad credit doesn't have to keep you from getting a much-needed, high-quality vehicle. At Terry Auto Outlet NC you can apply for financing that can make a quality car, truck, or SUV more affordable and help you build credit at the same time. And while your mind is on your credit score, here are some other tips for helping to raise it. 

Car Shopping: Tips for Improving your Credit Score 

  1. Pay your bills on time. This seems like an obvious point, but it's important to note that the largest impact to your credit score is your payment history. Up to 35% of your score is based on this single factor.  

  • Behind on payments? Talk to your lender. If you usually pay on time but miss one payment, request that the lender forgive the late payment. Often times, they will do so willingly. If you've missed several payments, call your lender immediately. Do not wait for the loan to go to collections. Instead, arrange a payment schedule that will allow you to catch up. The longer you pay your bills on time after missing a payment, the more your credit score will increase. As for your car payment, most lenders and even some used car lots in Kernersville, NC will repossess your car after a number of missed payments. And a repossession will do major damage to your credit score. So be sure to pay your car payment on time or make the necessary payment arrangements. The impact of past credit problems decreases over time as you continue to pay and a good payment pattern shows up on your credit report.  

  1. Keep your balance low. Your credit utilization ratio impacts 30% of your overall credit score. The best way to use your credit card is to pay off exactly what you spend on it every month, thereby keeping your balance at zero. One common misconception people believe is that you have to carry a balance to improve your credit score.  What really matters is your available credit to usage ratio, or in other words, the difference between your balance and your limit. Lenders want to see that you have credit available to you that you are not using.  

  • Already have credit debt that you are paying on? If you have been paying the minimum payment for a decent amount of time, your lenders probably love you. A great way to get your utilization ratio down is to ask your credit card company to increase your credit limit. Most times if you are a good payer who just has a high balance, they will say yes. However, if this will cause you to spend more and max the balance out again, avoid this solution. 

  1. Stop Checking your Credit Score. Another factor determining your credit score is the number of inquiries. Many people wrongly assume they need to frequently check their credit score to "stay on top of things," but this is not true. In fact, a major factor in determining your credit score is how many times your credit has been checked whether by you or other lenders such as used car lots in Kernersville, NC. The more instances of your credit score being checked, the more it hurts your credit. Checking too often gives the impression that you are not financially secure, and is therefore detrimental to your score. 

  • How can I check my credit without hurting it? A great way to keep track of your credit score is with free apps such as Credit Karma. Note that these apps may not give you an accurate read of your exact score, but will give you a close average of where your credit score should be based on the same factors the credit bureaus use. 

  1. Keep Good Accounts Open. People tend to think closing credit accounts actually helps their score, but it may not. Another factor of your score is the length of your credit history. Opening up new loans actually hurts this age of credit, as does closing older accounts. Acquire one credit card, and plan on using this card and not closing it or opening a new one in the near future. Lenders want to see that you stay with a line of credit for a long time. 

If you have questions about financing your next car, truck, or SUV, call the team at Terry Auto Outlet NC for help: (336) 497-5890.

Contact Us to Get Financed For a Car Today

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