Ways to Improve Your Credit Score Prior to Applying for a Loan

Posted by Ryan on August 13th, 2019

Your credit score plays an important role when you visit a lender to get a loan. Hence, it is important to know what your credit score is before you apply for a loan. Your credit score is a three-digit number that sums up the status of your credit based on how well you pay your bills and your debt profile. Your credit behavior is compiled in a credit history report showing your credit profile and it is based on this that you can have an idea if you will be approved for a loan with bad credit or no credit at all.

The higher the value of your credit score, the better your credit, and the stronger your chances of being approved for a loan. Your credit score may vary because there are different scoring models and sources and these credit reporting companies have different sets of data on which they base their scoring.

Today, it is easier to get your credit report and there are several ways to go about it. We will consider the different avenues through which you can get your credit score; some of the means are free while some are paid for.

1. Pay to get your Score from a Reporting Company: You can pay to get your credit score from credit reporting bureaus such as Experian, TransUnion, and Equifax. However, most lenders prefer the FICO score to evaluate their customers and the FICO score can be gotten from www.fico.com. You are entitled to request your credit reports from Experian, TransUnion, and Equifax once a year and afterwards you will be charged for subsequent request. 
2. Check your Loan Account or Credit Card: This is a more convenient way of regularly monitoring your credit score because most loan providers and credit card companies offer to provide you with your credit score for free in your monthly statement or within your online account information.
3. Use a Credit Score Service: There are several credit score services you can use online. Some of them will provide your score for free while others may require you to register on their website in order to get a credit monitoring service which comes at a monthly fee.
4. See a Credit Counselor: There are non-profit credit counselors who will provide you with your credit report for free and also review the details with you, and in the end advise you on what and how to improve or maintain it if it is good enough. They provide their services online and at local offices around you; you can search for them.

You will also get to know your score when you apply for an auto loan. Knowing your credit score can help you when you apply for a loan. If you have a good credit score, then you have the negotiating power to broker very favorable deals such as a low APR and interest rate. That is how well your credit score can work for you.

Learn more about credit scores from https://www.creditkarma.com/credit-scores/.