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How to rebuild your credit score in 2021

Posted by on Dec 23, 2020 - Archived under Bad Credit Car Loan Tips

After the year we have had, you will probably be as glad as we are to usher in 2021. Not only is the new year an opportunity for reflection, it’s also a chance to make changes and enhance our lives.

Improving your credit score is one way you could make next year better than the last.

Rebuilding your credit score

If your credit score is lower than you would like, the new year is the perfect opportunity to do something about it. Whether you’re planning on a car loan or not, improving your score is a worthy challenge and one we can help you with.

Here are a few tips for improving your credit score in 2021:

Check your credit score

First thing’s first. Check your credit score to see where you stand. You can check with Experian, Equifax or Transunion to find out your score. You only need to check with one and your first check should be free.

Check your credit report for inaccuracies

A quick win is to correct any mistakes or errors on your credit report. It could be as simple as a zero in the wrong place, a typo in your address or something completely different.

Go through your credit report line by line to make sure it is completely accurate. If you spot a mistake, follow up with the organization who made the entry and request it be corrected.

Manage existing debt

If you’re managing your debt just fine, you don’t need to do much here. If you’re in danger of missing a payment or are juggling too many lenders, now is a good time to sort it out.

Consider applying for a consolidation loan to pay off all your other borrowing so you only have a single outgoing and a single payment to manage. If you’re in danger of defaulting, talk to the lender beforehand as there may be something they can do.

Avoid missing a payment at all costs!

If you can handle your borrowing without a loan, pay off the most expensive debt first to lower the overall cost. That is usually credit cards but if you have a bad credit car loan or other borrowing, check the rates. Prioritize the most expensive debt and work your way down the list.

Use a credit builder card

Credit builder credit cards are designed to help you rebuild your credit score. They can be more expensive to service if you don’t pay it off at the end of the month so be careful.

Consider using a credit builder card for regular payments like gas or groceries and make sure to pay it off each month. It will definitely help rebuild your score!

If you need help preparing for a car loan, we can help. We can also secure great deals on car loans for those with a less than perfect credit score. Contact us today to see how we can help.

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