Not only is having a good credit score necessary to qualify for a loan, but in many cases, it can also dictate your loan terms, including your interest rate.
With that in mind, here are four easy things you can focus on to increase your credit score before you submit that application.
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1. Continuously Review Your Credit Reports
One of the easiest ways to increase your credit score in a hurry is to make sure that any incorrect or outdated information on your credit report is removed. In most cases, this can be done by pulling your report and sending a request to the proper credit bureaus to update information.
2. Don’t Miss Your Payments
Another obvious way to make sure that your credit score is as high as possible is to make sure that you never miss a payment. Having all of your accounts current shows that you are a responsible person worthy of handling the loan you are requesting.
3. Limit How Often You Apply for New Accounts
Having too many requests for new credit showing up on your credit report can also ding your overall credit score. With that, be cautious to avoid requesting new credit from multiple sources in a short period of time.
There is a big difference between hard and soft inquiries (Read more about the difference between hard and soft inquiries here). You don’t need to worry about soft inquiries like checking your own credit, but you should be very concerned about hard inquiries, which usually happen when you have to fill out a form approving a credit check.
4. Pay Down Revolving Account Balances
The amount of revolving credit that you use is another factor that can significantly impact your credit score. The best practice here is to keep your credit cards below 30% of their limits and work hard to pay down any cards above that threshold.
Once you understand how to increase your credit score and put that knowledge to work, it’s time to see what loans you qualify for! For an unsecured loan, the higher your credit, the better. At Unsecured Funding Source (UFS), we find that our clients have more options when their credit score is Excellent, or 720+.
UFS can help you access various types of unsecured loans and lines of credit, including programs that let you borrow as much as $250k with interest rates that start under 6%.
Do you have questions about unsecured loans or credit? Contact us today and we would be happy to answer any questions.