Buying a car is no small decision. Aside from finding a vehicle that matches your wants and needs, you have to find one at a price that fits in your budget. One of the most important factors in financing a vehicle is your credit score. Unless you’re paying the entire price of the vehicle upfront, you’ll need to apply for an auto loan, and your credit score will determine not only whether or not you get approved, but also the amount of interest you’ll pay on the loan. The higher your credit score, the better your chances are of paying minimal interest on the loan. If you want to boost your credit score or maintain the one you currently have, here are some helpful tips for achieving and maintaining good credit.
Always Make Your Payments on Time
This is one of the easiest ways to improve your credit score and avoid penalties. Making your payments on time — no matter if it’s a credit card payment or a utility bill — will show lenders that you are financially responsible. An excellent payment history looks great on any credit report.
Optimize Your Credit Utilization Rate
The measure of your credit balances against your available limits is an indicator of your credit utilization rate. The higher your utilization rate, the lower your credit score will be. In order to boost your score, experts recommend keeping the amount of credit you use under 30 percent.
There are a couple of ways you can improve your credit utilization rate. The most effective way is to pay your credit card balances in total before the due date. If you cannot pay the entire amount at once, at least pay more than the minimum amount. You may even put in a request to increase your credit limit, which will improve your credit utilization rate as well.
Diversify Your Credit Mix
When your credit history shows a healthy mix of different forms of financing, like student loans, credit cards and a mortgage, it reflects well on you. Successfully managing these loans will improve your credit score and stand out on your credit report. Diversifying your credit mix is a wise move.
For instance, if you want to improve your credit mix, opt to take out a low-interest loan on a larger purchase rather than paying it all in cash upfront. If you have refrained from getting a credit card, you may want to consider applying for one. Use it for small purchases and pay them off as soon as you can. This will not only improve your credit mix but your payment history, too.
Monitor Your Credit Report
Keeping an eye on your credit report can boost your score, especially if there are inaccuracies in the report. If you do happen to find an error, report it immediately to the relevant agency. You are entitled to a free credit report once a year, so pay close attention to it and ensure that everything is accurate. If there’s an error that needs to be corrected, your credit score stands to benefit.
Whether you’re shopping for a new Nissan Altima or a pre-owned Nissan Rogue, having a good credit score will help you significantly. You can learn more about financing at Gastonia Nissan by clicking here!