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This content is for informational purposes only and is not intended to provide financial advice.
It’s true, you can get a car title loan without inspection, as photos of your vehicle from all angles will suffice for these kinds of lenders. You don’t even need good credit, since your car’s title will serve as loan security. But for traditional bank loans, including mortgage and car loans, you’ll usually need at least a good credit score. Here are tips for improving your credit score.
What is a Credit Score?
A credit score is a triple-digit figure, usually between 300 and 850, that represents your credit risk or the probability that you’ll pay your bills in a timely fashion. Your scores are primary factors when considering whether to approve your application for a new account.
Your scores can also affect the interest rate and credit limit on credit card accounts. Loan rates and other terms are also usually influenced by your credit scores.
Note that you do have multiple credit scores as they are provided nationally by three credit agencies: Experian, Equifax, and TransUnion. Your credit scores may vary somewhat since your creditors may report data differently to each of them. Some may report info to just one or two creditors or none at all.
Your scores may also vary by industry. A car lender, for example, may use a score that emphasizes your auto loan history.
What Do the Numbers Mean?
Credit score ranges vary depending upon which of multiple scoring models is used for calculation, but generally, the breakdown is:
- Poor credit: 300 to 579
- Fair: 580 to 669
- Good: 670-739
- Very good: 740-799
- Excellent: 800-850
Ways to Boost Your Credit Score
There are steps you can take to increase your credit score, perhaps faster than you expected.
- Be strategic about paying down balances.Aim to use under 30% of your balance on any card, the lower, the better. Either make multiple payments throughout the month or reduce your balance before the billing cycle ends. Check your statement for a reporting date.
- Become an authorized user. Ask a friend or family member with good credit and a high credit limit whether you can be added as an authorized user. Your credit could improve without you using the card or even having the account number.
- Request a higher credit. When your credit limit goes up while your balance remains the same, your overall credit utilization drops right away. Make sure your spending is under control, though, so you don’t worsen your situation.
- Pay on time.If you pay late, no strategy to boost your scores will work. Plus, late payments can live on your reports for seven years.
- Dispute errors.There may be a mistake on your credit reports that is hurting your scores. You can quickly improve your credit by disputing such errors. Perhaps a payment was erroneously marked late or there’s negative info that should have fallen off your reports by now.
- Get a secured card.This can be a good way to improve or repair your credit since your cash deposit serves as collateral. Whatever your deposit is, that’s your credit limit. Making on-time payments will improve your scores.
In Summary
A positive credit score can open a multitude of doors in life, so it’s wise to try to improve your number. That is, unless you have a perfect score, in which case you likely would not have read this article. Following as many of the above tips as possible will do you good. In the interim, if you need help out of a financial emergency, you can always take out a car title loan, which doesn’t require good credit.
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