Today, most cars are bought by financing. Whether you’re getting a new or used car, odds are a bank or dealer needs to know your credit rating in order to approve you for a loan. That’s why it’s important to maintain good credit – something that’s easier than you might think.
Credit is determined by a number of factors, including whether or not you pay bills on time, how many loans and credit cards you have, as well as how long you’ve had credit, among other things. In addition to making the right financial moves, it’s important to be consistent when it comes to your credit.
Some basic tips for improving credit are:
Pay attention to revolving credit. Don’t borrow more than 30% of what you’re approved for on these accounts, especially credit cards.
Eliminate ‘nuisance balances’ like small bills and charges.
Old credit can be good. As long as you’re regularly paying off your debt, without missing payments, sometimes having consistent credit history is better than paying-off right away.
Don’t juggle debt – sometimes one missed payment is better than borrowing more money to pay what you already owe. Always think long-term.