If your credit score is low, you may be anxious about applying for financing. After all, your credit score and history can make or break your loan eligibility and determine how much money you will pay in interest. Follow these easy tips, then talk to our Mercedes-Benz financing team at Mercedes-Benz of Lynnwood to find out more!
Catch Up on Past-Due Accounts
The biggest obstacle to improving your credit score is older accounts in your name that are behind on their payments. A single missed payment can stay on your credit history for up to seven years, but catching up on any debt can make a big difference toward improving your credit score. If you’re struggling with credit card debt, find out if you can work out a debt management plan to get back in the black.
Lower Revolving Credit Balances
If you regularly pay down your credit card bill one month, only for it to build up again the next, you may be hurting your credit. Having a low balance relative to your credit limit improves your credit score over time, while getting close to the limit increases your “credit utilization ratio” and hurts your report. Sometimes, emergencies can’t be predicted, but try to keep as much credit available as possible — a utilization rate of 30% or less is recommended.
Limit Applications
While many applications for credit start with a soft inquiry, which doesn’t affect your credit score, they may later require a hard inquiry, which does. Keeping the number of credit applications down can help your credit score significantly over time. Before you accept a hard inquiry, make sure you’ll pass and can afford the hit.
Get Mercedes-Benz Financing in Lynnwood, WA
Raising your credit score is a great way to prepare for picking out your new Mercedes-Benz car. Come down to Mercedes-Benz of Lynnwood, your Lynnwood Mercedes-Benz dealership, and talk to our finance team to learn more about improving your credit score today!
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