Bad credit scores can negatively affect your life in many different ways. It can keep you from getting approved for your loan or mortgage application or they may result in higher interest rates. If you are planning to apply for an auto loan with bad credit, the first thing you should do is repair your credit score. While there’s no shortcut to getting a better credit score, there are certain steps you can take to boost your FICO score. Here are some credit score hacks you can follow to help you get the affordable car loans you deserve.
Dispute inaccurate information on your credit report
Improving your credit score should start with reviewing your credit report. As soon as you think of getting a car loan, one of the first things you need to do is to request your credit report. Take time to review it and make sure that all information indicated is correct. If you find anything erroneous, make sure that you dispute the inaccuracies right away. Confirm there are no late payments that are incorrectly listed. Also, make sure the amounts you owed are accurate. File your dispute with the credit bureau immediately should you find any errors.
Eliminate your debt altogether
One of the best and fastest ways to boost your credit score is by eliminating or at least reducing your credit card balances. This may not be an easy thing to do, but it will significantly help improve your FICO score. If you have multiple credit cards, identify the ones where you have balances. Gather the ones with the smaller balances and pay them off. This is an excellent way to make sure that you are not polluting your credit report with so many balances.
Schedule your payments
If you aren’t aware, paying your bills at the wrong time of the month can affect your credit score. This is true even if you pay off your balances in full in each month. So make sure your balances are paid off before their due dates. Don’t wait until the bills are due before you settle them. This payment pattern can help show reduced balances to the credit bureaus when your credit card companies send the report. Lower balances mean that you will have higher credit scores soon.
Use your credit cards responsibly
Now that you are trying to reduce your balances with your credit cards, make sure that you become a responsible card user moving forward. Use it only when it’s necessary. As much as possible, use cash for your purchases. Avoid overspending and always keep the gap between the amount owed and your credit limit. Even if you still have a huge space in your credit limit, it doesn’t mean that you have to use it all up.
Include your rental information to your credit files
Even if you are trying to apply for a car loan and not a home loan, you can use this hack if you are currently renting and do not own a house. Your rental payment history can be added to your credit reports. This means that if you have always been diligent with your monthly rental payments, it can significantly help your credit scores improve.
Convert your credit card debt into good debt
Lower credit scores are generally because of higher credit card debt. Even if you wish to clean up your debts by paying off your balances, not having enough cash makes it impossible for you to do it. There is another hack you can do to boost your credit score. All you have to do is to convert your debt into an installment debt. You can consider getting a personal loan to pay off your credit card balances. This personal loan is a good debt because you can have it paid in installment. It is something you use to pay off credit card bills. With the help of your installment loan, you can see an improvement in your credit scores in no time.
Credit score repair doesn’t have to be a complicated process. You can make use of these tips to improve your credit scores much easier than you imagined possible. Applying for a car loan? Please visit The Auto Warehouse.