How to Build Your Credit Score

Your credit score provides a snapshot of your financial health, telling potential lenders at a glance whether you’re a high- or low-risk borrower. The higher your score, the easier it is to get approved for a loan at the lowest available interest rate. So it pays to build your credit score before applying for your next loan. The process takes a little time and effort, but anyone can do it.

• Pay your bills on time: Payment history is the number one factor when determining your credit score. If you only follow one tip, have it be to always pay your credit cards and loans on time.
• Open a secured credit card: If you’re building credit from scratch, consider starting with a secured credit card backed by an upfront cash deposit. You’ll get this money back when you close the account.
• Become an authorized user: Another way to build new credit is to join a family member’s card as an authorized user. That card’s payment history is added to your credit files, so you want the primary user to have a solid on-time payment history.
• Review your credit report: You can pull a copy of your report from each of the three major credit bureaus—Equifax, Experian, and TransUnion—for free once a year. Look it over for any errors that could be hurting your score.
• Use your accounts, but keep your credit utilization below 30%: You build credit by purchasing items with your credit cards and paying off the balance each month. Aim to keep your spending under 30% of your credit limit. If you struggle with this, feel free to request a credit limit increase, which shouldn’t hurt your score.
• Avoid applying for multiple credit accounts around the same time: Taking out a car loan, buying a house, or opening a credit card results in a hard inquiry, which can affect your credit score for up to two years. Space these applications apart to prevent your score from taking a nosedive.
• Get credit for the bills you pay on time: If you have a thin credit file, help boost it by using a rent- and utility bill-reporting service. Even though these aren’t loan payments, you can still build credit by paying them on time each month.
• Keep old accounts open and resolve delinquencies: Lenders want to see an old average account age. This means you should keep your old credit accounts open, even if you don’t use them anymore. While you’re at it, look into paying off or settling old collection accounts and charge-offs.

Bad credit? No credit? At VIP Title Loans, it doesn’t matter! We don’t conduct credit checks, so you can still qualify for a loan when you need money fast. With the best title loan interest rates in Texas, there’s no need to look anywhere else. Call us at 817-265-2274, fill out our online contact form, or visit one of our five locations in the DFW Metroplex to learn more.