It’s an obvious conclusion. Mark filled up the gas tank and washed the car when he borrowed it. John spilled his Big Gulp on the seat, scratched the paint, and lost the keys. Who are you going to lend the car to the next time?
John’s a fun guy, always making you laugh. Maybe he just had a bad day. Are you really going to tell him no?
Yes, you are.
It’s all based on history and math. Mark has the better track record of taking care of the car, and Jim ended up costing you money.
How much you owe, how dependable you are at paying on-time, how many accounts you have…all this and more tells lenders if you are someone they can trust to pay them back. They want to loan you money because that’s how they make money. Your interest payments keep them in business.
How you can get loans at the best rate
Time for more history and math.
Go over your credit report, is it correct? Are those all your accounts? Are the dates and amounts right?
Get your FICO score. If your score is keeping you from the lowest interest rates, you need to raise it. A high FICO score means you have good credit, and lenders will battle each other to be the one that loans you money.
Raise your FICO score
The lowest possible FICO score is 300. An FHA mortgage requires at least a 580. The average American FICO score moved up to 695 as of April 2015.1 The score that lenders consider lowest risk is a perfect 850.
Most likely there’s room for improvement in your credit score. Every adjustment upward can save you thousands of dollars on large purchases like autos and homes.
To raise your score, you can:
Make payments on time, and make larger than the minimum payments
Ask for an increase in your credit limit, but don’t fill it up with debt
Have a variety of accounts, like credit cards and an auto loan
But be careful—opening several new accounts at once can actually hurt your credit rating. There are other hidden stumbling blocks that can also trip you up. Negotiating with credit bureaus to fix mistakes can take a long time. If you send them too many disputes, or requests for corrections, they may actually ignore you. Plus, a dispute in process on your record may cause a lender to turn you down.
Make yourself hard to resist
One of the best ways to improve your credit score is to get expert guidance. There are companies that make it their job to help people have better credit. Credit Repair Program offers “credibility services” that literally increase your trustworthiness to lenders.
These services range from personalized consultants to help you manage debt, to credit repair for cleaning up your history and raising your score. You don’t have to go it alone.
Start with a free consultation today.