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Improve Your Credit Without Doing Much

3600542728_c01d5b0766_bA lot of people overthink about and spend so much time trying to get a stellar credit. It’s true that an impressive credit will get you a great car loan deal. But rebuilding your damaged credit and achieving a good credit score do not have to put you at your wit’s end. How can that be possible? Credit.com shares some lazy, easy tips which require you to do almost nothing.

1) Set up an auto-pay system.

Thirty-five percent of your creditworthiness is determined by your payment history. That’s the biggest chunk. That means timely, sufficient payments certainly build up credit. But if you have records of late payments, you will need to concentrate on paying them up so you can see substantial improvement on your credit. Setting up an auto-pay scheme through your checking account helps you avoid missing a payment. It also removes the hassles of paying your bills and debts separately by yourself.

2) Ride on someone else’s good credit.

This is one of the laziest tricks here. All you have to do is talk to a family member, close friend or relative with good credit and ask if they could sign you up as an authorized user of one of their credit accounts. Your main responsibility is to keep the account in good standing. Otherwise, the effort will be futile and even damaging to both your credit and the primary user’s.

In auto loans, the chances of a borrower with bad credit to get approved for a car loan can be increased by getting a cosigner. The cosigner must have good credit standing. While this allows the borrower with bad credit to immediately get an auto loan, it also gives him or her the chance to make timely payments and improve his or her credit over time—something he or she might never be able to do without someone with trustworthy credit.

3) You don’t really have to shop for new credit.

Did you know that hard inquiries, which stay in your credit report for at least 2 years, make your credit look bad? Every time you apply for a car loan, a lender would check up on your credit as it evaluates your application—and that’s considered as a hard inquiry. So, multiple credit applications won’t really help improve your credit. Credit.com says refraining from applying for a new credit does your credit a favor.

4) Let your credit history age.

Lenders look at the age of your credit history, which accounts for 15 percent of your credit rating, when evaluating your application. The older the history, the more reference lenders have in assessing your likely payment behavior. They will also be more confident to write you an auto loan. Credit.com’s advice is to just “keep using credit responsibly.” This also means you should be wise when closing certain credit accounts.

Photo credit: Edward Leung / Flickr / CC BY 2.0




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