3 Easy Things You Can Do Today to Start Building Better Credit
Living with bad or no credit can make a lot of things that you expect to have in your adult life difficult to attain. A low credit score can make it impossible to find a loan for a car or to continue your education and can severely limit your housing and even employment options.
Fortunately, it’s not impossible to start building better credit. Here are three tips to help improve your score:
- Turn on auto-pay. Did you know that 35% of your credit score is calculated using data from your payment history? This means that even a single missed credit card or loan payment can severely impact your score. Authorizing auto-pay can help you avoid accidental financial missteps by automatically deducting minimum required payments.
- Manage cash flow. Building credit is all about managing your cash flow and building a sustainable budget. Sit down and take a hard look at how much money you have coming in and going out. If you have credit problems, chances are high that you’re spending more than you earn. Look for small ways to cut down your spending—for example, ditching cable for Netflix or limiting takeout—and put the extra money towards outstanding credit card payments.
- Set aside the credit cards. Your credit utilization rate (the percentage of your available credit you use every month) plays heavily into the calculation of your credit score. Credit card holders who regularly max out their cards and use their entire line of credit can be seen as financially irresponsible, leading to a lower credit score. If you have multiple lines of credit open, choose the card with the lowest interest rate, and set the others aside—but don’t cancel them. Having a higher amount of available credit will result in a lower utilization rate, and thus a higher score.
While building credit is important, there are some things that you can do right now to improve your situation. Car lots offering buy here pay here in Bucks County, PA can help you get the auto loan you need, expanding your options for employment. Anyone with a low credit score looking for a second chance is encouraged to contact PA Auto Credit today to discuss bad credit auto loans in Bucks County, PA by calling 800-371-1769.