Increasing Your Credit Score – Automotive

Ask anyone who has it, good credit is great. With good credit, you get loans easier and get them at a lower interest rate. If you are considering a car purchase soon, it would be a good idea to check your credit score. Hopefully there aren’t any surprises but if there are, don’t panic, there’s lots you can do to imporove it. sHow do you check your credit do you ask? There are many websites that will give you your credit scores for free. A popular one is www.CreditKarma.com, which gives you your credit scores from both Transunion and Equifax credit agencies. Go take a look. If you find that your credit score is lower than 700, it’s a good idea to boost it a little. Here’s a few things you can do. 

Look for wrong information

Your credit score is calculated based on information in your credit reports. Your reports are like little biographies of your financial past but guess what: sometimes they are wrong. Hope on over to one of the free credit report sites and check out your numbers from Equifax, Experian and TransUnion. Then look to see if there are any mistakes in what they are reporting. If you find any, contact the creditors involved and ask them to correct the errors. Generally speaking, the creditors that you have will want to keep you as a customer and will help you out.

Request a higher credit limit

This is likely counter intuitive but if you get a higher credit limit from your lender, your credit score may go up! This is because of “credit utilization ratio.” This number is the ratio of how much credit you use compared with how much you have available.  Credit agencies like to see that you have a small amount of debt compared to what your limit is. So, how do you get a lower credit utilization ratio? The best way is to pay off as much debt as you can.

Request deletion of negatives
 
Just as creditors have the power to add stuff to your credit report, they also have the ability to delete it. According to Mr.Ed, an Arizona-based automotive financing company, they are generally reluctant to do this, but if you are a good customer and have a good argument why the negative information should be removed, they might do it.

Here’s a good example: If you missed a payment because of medical reasons, thats a pretty good reason for missing a payment. The key here is to be able to show that the negative data isn’t a true reflection on you as an organized person. If you’re a longtime customer, remind the person how much the company should value your business and how many offers you get to go elsewhere.  They will usually get the hint and will see what they can do to take select information off your report.

Its worth the trouble

No one really wants to confront credit reporting agencies but trust us, its easier than you think. The people behind the scenes are just like you and I, if you are polite and make a good case for why your credit report could be made better, they will often help you out.