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How to Build & Maintain a Good Credit Score

How to Build & Maintain a Good Credit Score

Credit scores have a huge influence over our lives. Everything from credit card interest rates to whether we’re approved for an auto loan or not is influenced by our credit score. That makes having a good score important and is the subject of today’s post. Our Burford auto loan team is going to outline how to build and maintain a good credit score, allowing you to get those loans you've always wanted.

 

How to Build & Maintain a good credit score in Burford

 

First off, check your credit report. In order to know whether we actually need to improve it or not and by how much, we need to know the score.

 

Contact TransUnion or Equifax to get a copy of your credit report. You’re entitled to one free check per bureau, per year so use one now.

 

Check your credit report thoroughly for inaccuracy. Make sure to have any errors corrected by the organization that made them or use Equifax dispute resolution or TransUnion dispute resolution.

 

Then make a note of your score. It should be between 350 and 950 depending on the bureau you’re checking. The lower the score, the more work we have to do.

 

Check your credit cards

 

Credit card debt is factored into your credit score. The more of your available credit you’re using, the more your score reduces.

 

This is known as credit utilization and concentrates on revolving credit, that which can go up and down, like credit cards. If you use over 30% of your available credit on cards, it counts against you.

 

For example, if you have one card with a $4,000 credit limit and only owe $400. Your credit utilization is 10%. If you had $2,000 on that card, your utilization would be 50%.

 

If you have multiple credit cards, the credit limits and balances are collated together to make up the ratio.

 

If you have balances on your credit cards that take you over 30%, pay them down as much as possible. This will increase your score once the credit card companies report the payment.

 

Use credit

 

If you’re under the 30% utilization figure, you can use credit to help boost your credit score.

 

Use your credit card for gas, for everyday expenses, for groceries and whatever else you buy regularly. Set up an automatic payment to cover the minimum each month and to avoid missing a payment.

 

Aim to pay off the card in full each month to avoid paying interest.

 

Burford auto loans

 

Nobody gets an auto loan purely to improve their credit score as they don’t work like that. But, if you’re planning on buying a new car, using a Burford auto loan can help increase the score.

 

Once you’re over the initial hit from applying for the loan, the regular monthly payments will contribute towards your payment history. This can make up to 35% of your credit score and can improve it over the long term.

 

If you can get into the habit of clearing credit cards each month, that will go a long way to maintaining a good credit score. Combine with living within your means and financial success is yours for the taking!

 

If you need help or advice on anything to do with auto loans in Burford, contact Car Nation Canada today, we can help!

 

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