Your credit score is kind of a big deal. Having a good score can save you money on interest when you take out a loan, possibly assist you in landing your dream job, and may lower your insurance rates. Yes, your credit rating is important. However, it may be easier than you think to build and maintain the kind of credit you want to have.
It really just comes down to being responsible with your payments and making a few strategic decisions.
Everyday Credit Building
If you make a mistake that results in damage to your credit report/score, you can reverse the negative impact and eventually reclaim your good credit. But the easiest way to fix your credit is to never allow it to be harmed in the first place.
If you are just starting out with credit, you don't have to take out five loans and sign up for ten credit cards in order to build your profile. You can start out very slowly, only taking on a little debt at a time. The most important thing to remember is to make all of your payments on time, every single time. This is the best thing you can do for your credit score.
There are also services that report rent or utility bill payments to the credit bureaus. These bills normally aren't included in your credit score like loan and credit card payment are, but they can be. Our trusted partner can report your rent payments so you can improve your credit file and get the credit for payments you're already making.
Even if you do have some credit damage to undo or debt to eliminate, keeping current with your bills will help your cause in a big way. Late payments count against you, showing up as negative items on your credit report. So, avoid undoing any progress that you have made with your credit by allowing an unobserved due date to slip by.
The "Set It and Forget It" Plan
If a bad experience has left you "credit shy" or if you are just starting out with credit and are reluctant to over-commit yourself, there is a simple way to get your foot in (or, back in) the door. This plan requires minimal effort and risk, so it is a safe strategy for almost any consumer.
- Choose a bill. This bill should be for a necessary service that you pay the same amount for every month. Options to consider are your cell phone bill, your cable fees or monthly charges for a particular utility.
- Apply for a credit card. This card can have a small limit, but try to sign on for an account that comes with low fees and good rewards. If necessary, opt for a secured credit card.
- Set up auto-pay. Arrange to have the bill that you have selected automatically charged to your new credit card every month.
- Pay your credit card bill. You don't have to use your credit card for anything else, but you will still be building credit by consistently charging this one thing. If possible, arrange for your credit card payments to be automatically drafted from your checking account. This way, it is guaranteed that you will always be on time with your payment.
Once you have established a comfortable routine of paying one bill a month with your credit card, you may want to expand your usage and pay for two or three services monthly with the same card. Just make sure that you are consistently paying the account balance and that you are never using more than 30% of your available spending limit.
Financing Your Car
Having access to reliable transportation may be a necessity. For most people, it is difficult to avoid the need to own and drive a car, so why not take advantage of the credit building opportunities that your next car purchase can provide?
Paying cash out of pocket for an inexpensive vehicle can be risky. First of all, you may end up with an older car with higher mileage that may end up spending more time in the shop than on the road. Repair bills can get expensive, and no one wants to miss work, school or any other commitment because of transportation issues.
Also, buying a car with cash will do nothing to improve or build your credit. On the other hand, if you finance your car purchase, your credit score will gradually increase with every timely payment you make on your loan. It's like a double win. You get the car you need and the potential to build the credit profile you want.
And if you are worried about getting approved for an auto loan because you have damaged credit, you should know that there are lenders and dealers out there who are willing to work with your situation. In fact, buying a vehicle with a bad credit car loan is one of the best ways to start getting your credit back on track.
Getting Your Car and Rebuilding Your Credit
If you are ready to get approved for an auto loan and get on the road to better credit, Auto Credit Express is all set to help you with our fast and easy process. We assist thousands of bad credit car buyers every day, and the service we provide is absolutely free.
All you need to do is fill out our simple and 100% secure online car loan request to get started today.