Achieving a good credit score can be challenging if you have a bad or limited history, but you can't improve your score without getting access to a credit line, which is difficult to obtain with a low score.
Boosting your credit score is possible with products that come with more flexible criteria, such as secured credit cards or private label credit cards like the ones that are dedicated for tire and auto maintenance.
Boost your credit score with a new line of credit
Qualifying for a bank credit card, a loan, or other traditional financial products can be difficult if you have a low credit score or a limited credit history. In those situations, a secured credit card can be a great way to start building up a positive history.
A secured credit card is easy to qualify for because the creditor will require you to make a deposit. The deposit acts as collateral in the event that you can no longer make payments on the credit line. That collateral lowers risk for the creditor, which means you can get approved even if you have a less than perfect credit history.
You might also be able to qualify for an unsecured card with a low credit limit, like a private label credit card offered by a retail location. These types of credit cards often have generous approval ratings because the credit limit they come with is low, limiting the creditor's risk.
Whether you apply for a secured or unsecured credit card, opening a new line of credit will increase your available credit limit and help you build a positive payment history. Those two factors will improve your credit score over time.
Keep old credit accounts open
Don't close a credit line that you have paid off! One of the factors that influence your credit score is your credit utilization rate. Ideally, you should use 30% or less of your available credit.
A credit line that is paid off will appear as available credit on your report and will help you lower your availability.
The age of your credit accounts is another factor that can boost your credit score. Your ability to pay down balances over time is a positive signal for credit agencies. Keeping old accounts open can help you gain a few points on your credit score.
Saving with coupons, discounts, and deferred interest
If you are interested in a credit card that could increase your credit score, an automotive private label credit card is worth looking into.
Here is how that kind of credit card could help you save money:
- Say "yes" to service: pay for small repairs and maintenance immediately to avoid paying for more expensive repairs down the line.
- Benefit from deferred interest programs if you pay off your balance by the deadline.
- Automotive credit cards are offered in partnership with retailers; as a cardholder, you will qualify for exclusive promotions and special discounts or coupons.
Credit First National Association partners with thousands of automotive retailers nationwide to offer credit cards you can use to finance new tires, repairs, or maintenance. The application process is quick and easy, and the criteria are flexible to help you qualify for a credit line even if you have a low score or limited credit history.