Mans Hand Reviewing a Credit Application

If you’re planning to finance a new vehicle in Rogers, you want your credit score to be the best it can be. A good credit score brings major benefits for the car-buying process, from lower interest rates to better offers from lenders. That’s why we often hear from drivers who wonder, “How can I improve my credit score before I apply for a loan or lease?”

The friendly finance experts at Cornerstone Chrysler Dodge Jeep Ram are here to help! Read the guide below to learn how you can improve your credit score, and don’t hesitate to reach out for additional car-buying tips.

Check Your Credit Reports

Fortunately, there’s a lot you can do to improve your credit score quickly — from paying off old debts to sorting out errors that may be keeping your score down. Before you can improve your credit report, you’ll need an up-to-date score. You are entitled to one free credit report per year from one of the three major credit bureaus: Experian, Equifax, and TransUnion.

Assess Your Debts

Once you know what’s in your report, make a list of all your debts and determine which ones are impacting your score the most. Rank your debts according to these two key factors:

  • Debt to credit ratio: This factor measures how much credit you have available vs. how much you’re currently using. If you’re using more than 30% of your available credit, your score will take a hit.
  • The number of cards with balances: The more cards with balances, the lower your credit score.

Follow a Payment Plan to Improve Your Credit Score

Creating a payment plan and setting goals for your debt will help you to stay on track. Focus first on paying off any debts that have gone to collections, small debts older than 5 years, and small balances on cards. You’ll also want to follow up on any suspected errors in your report. Then, start chipping away at larger debts.

Open a Credit Card

If you’ve never opened a credit account before, your credit score won’t be as high as it could be. That’s because you need to open credit accounts and establish a timely payment history in order to build up your credit. So how can you improve your credit report if you don’t need a credit card? Use your card to pay one recurring monthly charge, making sure you set the money aside to pay off the balance when the bill arrives.

If you don’t qualify for a regular credit card, consider a secured credit card with a small limit and an initial deposit of up to a couple of hundred dollars to open.

Build a Credit Age

If you are starting to build credit today, one way to improve or add to your history is to become a user on a family member’s account. As long as they have paid their bills on time it will begin to reflect well on you. Just make sure both parties have a clear agreement on who actually gets to use this line of credit and how payments will be handled.

Minimize New Credit Applications

Be judicious in applying for new cards or loans, despite the advantage having open lines of credit can provide. When lenders do a hard inquiry of your credit, it can end up impacting your score for up to a year.

Get Tips for How to Improve Your Credit Score with Cornerstone Chrysler Dodge Jeep Ram

Looking for additional advice or help to improve your credit report? Contact us to speak with the finance center at Cornerstone Chrysler Dodge Jeep Ram. Our finance experts can walk you through the process and answer any additional questions in Elk River, like what liability insurance covers, and more.

Cornerstone Chrysler Dodge Jeep Ram 45.2834823, -93.5486677.