If you have a credit score of 574 or less, you may find it challenging to get a credit card, line of credit or auto loan. You may even have difficulty renting an apartment or getting a job. A bad credit score is such a disadvantage since lenders, landlords and even some employees use this report to evaluate how financially responsible an individual is.
If you want to improve your credit score in 2020, here are some new year’s resolutions that may help:
Avoid in-store credit card offers
During this season, you may receive offers to sign up for a store credit card to save money on your next purchase. While it is easier for someone with a low credit score to get this type of credit card, there is a downside. Usually, these in-store credit card offers come with high interest rates, which can make it difficult to pay off the balance. Furthermore, every time you apply for a new credit card, it negatively impacts your credit report in the short term.
Do not max out your cards
You may have a lot of Christmas shopping left to do, and you may be tempted to put them all on your card for the points and other perks. But you must be careful not to rack up debt you won’t be able to clear after the holidays have ended. The more debt you put on your cards, the harder it will be to pay off and the worse your credit score will become.
Limit your credit accounts
This period may be a good time to start paring down your credit accounts. Evaluate all your credit cards and see which ones have benefits and rewards that best suit your needs. If you have cards that you do not need, get rid of them.
Open a savings account
A good way to improve your credit score is by opening a savings account for when you need some extra cash. If you put money away for emergencies, you are less likely to use high-interest lines of credit when in a bind. You do not need to start with much, as little as $20 or $30 each paycheck can go a long way when you need it.
Pay bills on time
You should always aim to pay your bills on time. One of the fastest ways to do damage to your credit score is by consistently making late bill payments. Prioritize your spending to match your finances so that you will not have difficulties when your bills are due.
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If you need an auto loan while working to improve your credit score, we can help you at Instant Auto Loans. We are a Metro Vancouver auto financing institution offering instant car loans based on the equity in your vehicle. Our car loans are short term, easy to qualify for and straight-forward to repay.
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