Prior to applying for a home loan or vehicle loan, it helps to check your credit score to see if you're eligible for a loan. The criteria and minimum credit score requirement for a loan varies amongst lenders. However, a score of 650 or higher can help you qualify. Fortunately, even if you have a low credit score, simple measures can help boost a low score and help you qualify for financing.
Stay Organized
Forgetting due dates or losing credit card statements can wreck havoc on your credit score, especially if you forget to mail payments by the due date. Late arrivals result in additional fees, and if you're 30 or more days behind on payments, lenders can justifiably report the delinquency to the credit bureaus. Each negative remark on your report lowers your credit score. But you can avoid negative statements by writing due dates on a calender or day planner, and paying statements as they arrive in the mail.
Pay Attention to Balances
Credit cards offer a convenient way to shop or pay for essentials such as fuel or groceries. But if you're not careful, you can easily acquire a ton of debt, which can reduce your available credit and decrease your credit score. There's nothing wrong with using credit. In fact, using credit and paying off the debt is a surefire way to add points to your credit score. Before pulling out your plastic to make a purchase, ask yourself if you can pay off the purchase by the next billing cycle Having a debt elimination plan in mind alleviates high balances and helps you keep a good credit rating.
Dispute Mistakes
Credit reports are not error-proof. Creditors do make mistakes and they may accidentally place another person's negative information on your credit file. Having an erroneous lien, judgment, collection account or late payment can bring down your credit score, and if applying for loans, lenders may hold this information against you and refuse your application. Getting a copy of your credit report at least once a year and checking the contents for accuracy is a key way to stay on top of your credit history. Annual Credit Reports gives each consumer one free report a year.
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