Simple and Effective Tips for Improving Your Credit Score

You're ready to apply for a loan and start shopping for cars at Members Auto, but you're worried that your credit needs work. While it is based on multiple factors, there are a few things you can do to quickly improve your credit score. Here are some easy tips for improving your credit score.

How to Improve Your Credit Score

1. Make All of Your Payments on Time

One of the easiest tips for improving your credit score is to make all your payments on time. This establishes a solid history of on-time payments.
The later you make your payments, the more it hurts your credit. For example, a payment that's 90 days late hurts your credit more than a 30-day late payment.
If you have any accounts that are past due, get them up-to-date as quickly as possible. The more instances of late payments on your credit report, the lower your credit score.

2. Have Multiple Kinds of Credit on Your Credit Report.

For the best credit score, your credit history shouldn't consist of a single type of debt (e.g., all credit cards). Instead, use multiple types of debt products, like auto loans, credit cards, and lines of credit.

3. Lower Your Credit Utilization

When your credit cards and credit lines are maxed out, this hurts your credit. Ideally, you shouldn't use more than 30 percent of your available credit. However, reducing your credit utilization by any amount should improve your credit.

For example, assume that your total credit card balance equals $5,000. The credit limit for your cards is $10,000.
Your credit utilization is 50 percent. If you can pay your balance down to $2,900, your credit utilization is 29 percent.
However, paying your balance down to $4,000 lowers your utilization to 40 percent. You should still see an increase in your credit score.

4. Don't Apply for New Accounts Too Frequently

Don't make it a habit of regularly applying for new credit. Each time you apply for new debt, the lender pulls your credit.
This puts a hard inquiry on your credit report. A lot of hard inquiries make it seem like you're desperate for credit, and this can lower your credit score.
When rate shopping for a loan, apply for multiple loans over a couple of weeks to minimize the impact to your credit.
Ready to start shopping for your next vehicle? Contact Members Auto today!

Contact our Credit Union to Learn More

To find out more about an auto loan with the credit union, contact Clark Country Credit Union at 702-228-2228. Not only does your credit union provide financing for vehicles, we also sell and buy them through Members Auto. We’ll help you save and get the lowest possible interest rate in addition to auto loan protections like GAP Coverage and Mechanical Repair Coverage.