You might think your credit score and credit history aren’t a big deal. But when it’s time for a big purchase, you need a good credit score to buy the item you want. Good credit indicates to companies you’re a reliable buyer that will send car payments on time each month. You’re more likely to find a better car, a better price, and a car payment with a lower interest rate if you have solid credit.
If you don’t have a credit score yet, the first step is understanding what to look for when you apply for a credit card. If you already have developed credit, here are some steps to improve your credit score before buying a car!
Pay Bills on Time
The easiest way to develop good credit is to pay your bills on time. Allowing past-due statements to accumulate will quickly drop your credit score and increase late fee payments. As time progresses, on-time payments will improve your credit score over time.
If you have trouble paying bills promptly, try to make a list of every monthly bill you must pay to ensure another payment doesn’t slip through the cracks. You might also want to consider arranging automatic payments.
Avoid Applying for New Credit
You have reliable credit cards set up, and they’re doing you well! Some people might think that opening another credit card will improve their credit score, but this action has the opposite effect. Applying for multiple sources of credit during a short period of time diminishes your credit score. It’s an indication you might have financial hardships and require credit to assist you through that time.
Stick to the credit card you love and continue to submit your payments on time to keep your ideal credit score.
Closely examine your credit report to determine if there is any inaccurate information that is affecting your credit. Sometimes, you make a payment on time, but the reported payment date implies it was late. There may even be a larger issue that requires you to contact a credit bureau to begin an in-depth investigation.
If you see any deviations on your credit report you know to be inaccurate, always file a dispute. You don’t want to allow any misinformation to affect your credit score or ability to purchase vital items in the future.
Improving your credit score takes time. Be patient and plan so that when the time comes to buy a car, your credit score is just where it needs to be!