When it’s time to apply for a home mortgage, credit card, or car loan, a credit score carries a lot of weight. This three-digit figure shows lenders how responsible people are with managing debt. The higher the score, the better the rates and terms on all types of loans. If your score is on the low end, here are a few tips to boost it.
1. Get Your Credit Reports
Start by requesting your credit report from the three credit bureaus, TransUnion®, Equifax®, and Experian®. You’re entitled to a free one each year. The reports will show a history of all debt obligations. Check them thoroughly for errors, such as loan defaults that you didn’t create. If you spot mistakes, send a written letter to each credit bureau explaining the disputes. Once you know how your credit report looks, you can tackle the obligations not in question.
2. Make Small Credit Card Transactions
Lenders like to see loan applicants who can diligently manage their debt. If you have a credit card, make small transactions and pay them off in full each month. A pattern of on-time payments, regardless of the transaction amount, shows lenders you don’t overspend.
3. Restrict Credit/Loan Applications
It may be tempting to apply for credit cards and loans to cover expenses, but you should resist. Every time a person submits an application, their credit score may drop since lenders pull credit reports for each one.
4. Clean Up Old Debt
Depending on the time frame, it may not be too late to clean up old debt. If you have outstanding loans sitting on your credit report, reach out to the respective lenders and ask if you can pay a portion of the debt to settle the account. Some lenders may agree to this arrangement. Once the debt is paid off, your credit report should be updated.
Need to improve your credit score or having trouble applying for a loan? Hawaiian Financial Federal Credit Union can help! We offer share secured loans and credit card accounts to help you rebuild your credit. With hundreds of millions of dollars in assets and over 50,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services online, follow us on Facebook, Twitter, and Instagram for news and updates, or call 832-8700 on Oahu or toll-free at (800) 272-5255 with any questions.