Breeze Lease Purchase

Bad Credit and You: 3 Ways to Improve Your Credit Score

One of the most important measures of your financial health is your credit score. Lenders can see at a glance how responsibly you use credit. The better your credit score, the easier it will be to get new loans or lines of credit. You may also be able to borrow at the lowest interest rates if you have a higher credit score.

There are a number of quick and simple things you can do to improve your credit score. Curious about where to start? Breeze Lease has you covered. Keep reading to find out more.

How to Build a Good Credit Score

Thankfully, there are several things that you can do to improve your credit score. Read on to learn more.

Watch Your Bill Payments

Payment history accounts for 35% of the impact on your credit score. For this reason, it’s better to keep paid-off debts on your record (such as old student loans). You benefit if you pay your debts responsibly and on time.

So a simple way to raise your credit score is to avoid late payments at all costs. Some tips for doing that include:

  • Creating a filing system, either paper or digital, for keeping track of monthly bills
  • Setting due-date alerts so you know when a bill is coming up
  • Automating bill payments from your bank account

Limit Requests for New Credit (Cards, Loans, Mortgage, and More)

Your credit history is accessed by two types of inquiries, known as hard and soft inquiries. Your soft inquiry may consist of checking your own credit, granting a potential employer permission to check it, checking your credit with financial institutions with which you already do business, or checking your credit file with credit card companies to see if they’d like to send you pre-approved credit. Your credit score will not be affected by soft inquiries.

A hard inquiry, however, can adversely affect your credit score for up to two years. An application for a new credit card, a mortgage, an auto loan, or some other form of new credit would constitute a hard inquiry. It is unlikely that the occasional hard inquiry will have much of an impact.

You can damage your credit score if you make many of them within a short period. Banks might interpret your need for money as a sign of you having financial problems. They may decide that you pose a greater risk of payment default as a result. Avoid applying for new credit for a while if you’re trying to improve your credit score.

Debt Consolidation

It might be advantageous for you to obtain a debt consolidation loan from a bank or credit union and use it to pay off all of your outstanding debts if you have a number of them. If you can get a loan with a lower interest rate, you’ll be able to pay off your debt more quickly because you’ll only have one payment to worry about. This could raise your credit score and lower your credit utilization ratio.

Consolidating multiple credit card balances by paying them off with a balance transfer credit card is a similar strategy. During a promotional period, these cards frequently charge 0% interest on your balance. But watch out for balance transfer fees, which can run you anywhere from 3% to 5% of your transfer’s value. You don’t have to put your life on hold while you rebuild your credit score. At Breeze Lease, we offer lease-purchase solutions, even with bad or no credit! Check out our credit solutions, or contact us to learn more.