How to Improve Your Credit Score to Get a Better Finance Rate

Whether you’re looking to buy a house, a car, or you’re looking to take out a loan, lenders want to know that you have good financial health.

Lenders look at your credit score to determine how responsible you are with credit, and they can trust you with a loan or if you’d make car or mortgage payments on time. The higher your score, the easier it will be to acquire new loans, lines of credit, and you’ll have lower interest rates.

Read more below if you want to improve your credit score to get a better finance rate.

Add To Your Credit Mix

When working on improving credit scores, many people focus on credit cards, but another way to add to the credit mix is to take out a credit builder loan.

A credit builder loan is a low-cost option, but make sure the one you want reports to all three credit bureaus. A credit builder loan not only helps to improve your credit mix, but lowers your credit utilization.

Consolidate Debts

Nobody likes having outstanding debts. Not only is it stressful to think about, but there are multiple payments, interest rates, and deadlines.

When you consolidate your debts, you only have one payment, interest rate, and a deadline to worry about, and often you can get a lower interest rate, which helps you pay down the debt faster, which improves your credit score.

Credit Monitoring

Monitoring your credit not only helps you to improve your credit, but assists in preventing fraud and identity theft. When you sign up for a credit monitoring service, you’ll receive an alert if there’s a new account on your credit file. You can find many free credit monitoring services online. 

Dispute Errors on Credit Report

It’s vital to check your credit report once per year, which you’re entitled to free reports from the three credit bureaus, and check for errors.

These mistakes include having someone else’s credit activity mixed in with yours, payments that they marked late when they weren’t, or outdated information.

It does take time to go through, but it’s well worth it. Especially if you're considering purchasing a home or refinancing your home

Pay On Time

Making payments on time has one of the most significant impacts on your credit, as well as never missing a payment. We all become busy and forget things, which is why automatic payments are helpful.

When you have a history of making payments on time, or even before the deadline, not only does it help increase your credit score, but it also proves to future lenders that they can trust you to make payments on time.

There are many factors that play into building a better credit score, such as paying down your balances and using 30% or less of your available credit.

If you believe the time is right for you to go through the mortgage process and buy a home, Equity Mortgage Lending is here for you.

Reach out to us by filling out our online form or call us at 1-800-332-9221.


* Specific loan program availability and requirements may vary. Please get in touch with the mortgage advisor for more information.