When applying for a loan, everybody wants to get the lowest interest rates. However, getting the best possible rate will only be possible if you have good to excellent credit. Its IMPERATIVE that you check your credit first BEFORE you apply for a personal loan, car loan, bad credit credit card, or mortgage.

If you found that your credit score needs improvement, here’s what you can do:

Remove negative information.

Negative information may be the reason for your poor rating. Make sure that your credit report contains no errors. If discover false information, send a dispute letter to the bureau that issued your report.  Be aware that you need to check all 3 credit bureaus.   Each one may be reporting different things about you.  Make sure you have improved your credit as much as you can so that you can obtain the best interest rate.

Also make sure you get your credit report WITH SCORE.  You  are entitled to a free credit report each year thru annualcreditreport.com   but it WILL NOT include your credit score.   You can obtain your credit scores here.  Of if you are considering becoming one of our credit repair clients, its included in your package.

Do not max out your credit limit.

Keep your credit limit usage minimal. Lenders prefer clients who do not use up more than 30% of their credit limit.

Don’t close old accounts.

If you plan to cancel a credit card, make sure it’s not the one that you’ve had for a long time. Closing old accounts is like deleting the oldest parts of your credit history. If your old cards have high interest rate, use it occasionally for small purchases and pay them off at once to avoid the additional interest and  and possible late fees.

That was a problem I had.  Since I used the card so infrequently, it wasn’t included in my automatic payments.  I called the credit card company and had the late charges removed.  And I now make it a point to use the card and as soon as I get home, I log in and make the payment.

Submit payments on time.

Being prompt in submitting your payment can really
improve your credit score. Timely payment makes up about 35% of your total score so even a single late payment can badly affect your credit score.  Setting all your bills to automatic payment, either thru the credit card company or thru your bank will help prevent you from paying late.

Avoid submitting multiple applications to different lending companies.

When applying for a loan or a new credit card, do not try to submit multiple applications to different lenders. This will only send a negative impression to lenders who may inquire about your report.

Just recently we had a bad credit loan client apply for an equipment lease.  In the last 30 days he had 28  different pulls on his credit!  And as we looked back past 30 days, we could see he had applied for credit every 2 – 3 days for the last 2 months!  His credit score was also now below a 520!   I explained to him, that unfortunately we wouldn’t be able to approve him for the equipment lease because his income didn’t support all the “possible” loans the inquires represented.  He said everyone turned him down, and we actually have a program he could have qualified for, but we have to wait and make sure we know EXACTLY how much new debt he may have incurred.

He was completely unaware (he says) that all those inquires would bring his credit score down.  Or that it sent a negative signal to the bank.

Call in advance if you’re going to be late.

If for some unexpected reason, you cannot submit your payment on time, call your creditor in advance and ask for an extension of your due date. Request your creditor not to report it as late payment to protect your credit history.  Sometimes they will do this and sometimes not.  But it doesn’t hurt to ask.   Sometimes if you tell them your due date is inconvenient to the way you get paid.  They may agree to change your due date permanently for you.

Hire a reputable credit repair company

If you can’t do it on your own, or if you have tried and aren’t getting anywhere.  Its time to think about hiring a professional credit repair company.   We work with one that has helped many of our clients remove negative items on their credit report and made it possible to obtain better financing terms for them.