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101 Powerful Tips for
Legally
Improving Your Credit Score
Loans and Your Credit
Score
Loans affect your credit
score more than almost any other item on your credit report.
The types of loans you have, how long you have had loans, the
amounts you owe and your payment history on your loans has one
of the biggest impacts on your credit score. If you can control
your loans, you can boost your credit score. There are a few
tips that can get you well on your way to painlessly managing
your loans:
Tip #68: Refinance loans
If you got a poor deal on a
loan - especially a major loan such as a car or home loan - or
if your credit rating has improved since you got your loan, you
may want to consider refinancing. Refinancing means that you
take your loan to another lender in order to enjoy better terms
or rates.
You don’t want to do this
too often - it prevents you from developing long-term
relationships with lenders and results in inquiries on your
credit report - but if you have good reasons to refinance, it
can actually help you repay your debts. For example, if you can
get more reasonable monthly bills that you will actually be able
to repay, refinancing can help prevent all those non-payment
credit dings that come from not being able to pay your bills.
Making your payments more affordable can save you money and can
save your credit score.
In the short term,
refinancing can push your credit score down, as you will acquire
inquiries on your credit report as you look for a new lender and
as you close old accounts and open new accounts. In the long
term, though, refinancing can be a good way of boosting your
credit score. If you are now missing or delaying payments
because you cannot afford monthly bills, for example,
refinancing a loan or two can be a good way to get back on track
and can get you repairing your credit score again.
Tip #69: Look for loans
that are offered for bad credit risks
If your credit score is bad
but you need a loan, consider services that cater to people with
poor credit scores. These companies know that some creditors
with poor credit scores will still make their payments on time
and so are willing to speak with debtors other companies would
reject out of hand. You may have to deal with higher interest
rates, but choosing a bad credit lender can go a long way to
ensuring that your credit score won’t disqualify you for a
loan.
In the long run, you can
always refinance your loan to take advantage of a better rate
once your credit score improves.
Tip #70: Always know your
credit score before speaking to lenders
Many people assume that
having an excellent credit score is enough when applying for a
loan. It is not. Some lenders are not terribly scrupulous
about offering you the best rate - especially if they can gain
by having you pay higher interest. Some lenders will try to
tell you that your credit score is lower than it is and that
disqualifies you from a better rate. Some may rely on your
ignorance (or what they think of your ignorance) about your
credit score to quote you a worse rate.
Never let a lender do this.
Always look up your credit score before shopping for a major
loan and if you are quoted a rate you think is unfair, speak up
and tell the credit officer that your credit score of 700 (or
whatever the score is) seems to indicate a better loan.
Show the lender your printed
copy of your credit score. If the lender tries to tell you that
lenders get more accurate credit scores than customers who look
up their own credit scores or tries to tell you that your credit
score has changed, walk away. There are many reputable lenders
out there. Find one of them rather than relying on a lender who
will try to lie to make a profit.
Tip #71: Consider
speaking to lenders face-to-face if you have a bad credit score
If you apply for a loan over
the telephone or online, your credit score will count the most,
because that is all the lender will likely look at before
getting back to you with a quote. If you have bad credit but
still need a loan, meeting with a lender face to face is your
best bet because an actual meeting allows a lender to get an
impression of you, and allows you to explain the problems you
have had in the past and the things you are doing now to make
yourself a better credit risk.
When you meet worth a lender
in person, you force them to stop looking at you as a credit
score number and make them look at you as an entire person.
This can be a huge advantage for you (especially if you are
personable) and can help you get the loan your credit score does
not completely qualify you for.
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