Tips For Improving Your Credit Score Before Refinancing
Take some time to raise your score (and check your credit report for inaccuracies) before you refinance. Boosting your credit score unlocks more refinancing options and can help you secure the lowest interest rate possible. The following are some tips that could help improve your credit score.
Get Acquainted With Your Credit
Checking your credit not only lets you see what you need to improve, but it allows you to uncover issues you don’t even recognize.
Our friends at Rocket MoneySM allow you to check your credit each week without affecting your score. You’ll receive your free TransUnion® VantageScore® 3.0 credit score and report. You also get personalized insights on where your credit can improve.
Consider A Secured Credit Card
If you don’t qualify for a loan or traditional credit card, a secured card can allow you to build credit when needed. You leave a deposit with your lender when you get a secured card, and that deposit then becomes your line of credit.
Secured cards offer a fantastic way to build credit when you might have none, but remember, you must still make your payments on time. Just like unsecured credit cards, missed or late payments will hurt your score.
Keep Your Credit Utilization Low
Credit utilization refers to the percentage of your available credit that you use every month.
Let’s say you have a credit card with a $10,000 limit and you put $5,000 worth of monthly expenses on it. In that case, you have a utilization ratio of 50%. If you use 100% of your credit, you might hear someone say you’ve “maxed out” your credit.
Keep your utilization ratio low month after month to raise your credit score. Your utilization ratio makes up about 30% of your FICO® Score.
Pay All Your Bills On Time
About 35% of your FICO® Score comes from your payment history, making it the single most important factor in building a great credit score. The fastest and most reliable way to improve yours is to build a solid history of on-time payments for each of your accounts.
Set reminders to pay each account on time every month by noting the minimum payment and due date somewhere that you’ll see often, like on a desk calendar or on your phone.
