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4 Credit “Don’ts” from a Colorado Springs Dealership

 

When you’re ready to begin shopping around at Colorado Springs dealerships but worried about a low credit score, what can you do? Is there any way to improve your credit score? 

 

Absolutely! And there are some clearcut things to avoid to make sure you’re on the right track. Below we’ve outlined 4 mistakes to avoid making to keep from further damaging your credit score. Follow these guidelines and you’ll quickly be on your way to buying a new car. 

 

Credit Tips from a Dealership Near You

 

1. Don’t be late with your payment 

 

Your payment history is one of the most important factors that determines your credit score. Colorado Springs lenders and dealers want to know how dependable you are at paying your bills. Creditors consider your past payment performance a good indicator of your future performance; therefore, you must make a habit of paying your bills on time! Even one single missed payment means your credit score could drop by 100 points. Experian says that late or missed payments will remain as negative information on your credit report for seven years; however, the good news is that their negative impact on the credit score declines with each passing year. Meaning, older missed payments have less effect than if you miss a new deadline. 

 

With the ease that online banking and bill pay offers, there’s very little reason why you should not be on time for each bill. 

 

2. Don’t close credit cards

 

Closing an old credit card can actually hurt your credit score. The main reason to keep it open is that it increases the total amount of available credit over the number of open revolving accounts. If you close an account, it decreases the overall available credit limit. Having a higher credit limit across your cards allows your credit utilization ratio (or balance-to-limit ratio) to remain low. Second, an older account in good standing can positively boost your total credit score. 

 

3. Don’t keep high balances

 

“Maxing out” your credit card might be what they do in the movies during a shopping spree, but this isn’t a practice you want to do in real life! If your credit limit is $15,000 and you charge $12,000 you are using 80% of your available credit. If looking for a car at a Colorado Springs dealership, this will likely cause more hurdles to jump through while obtaining financing. Lenders get nervous with a high percentage of debt balances like this because your debt-to-credit ratio is too great. Even if you are paying the amount owed every month on time, CNN Money advises you to keep the amount owed to 30% or less than your credit limit. They say, “it’s not about how much actual debt you carry; it’s about how much of your available credit you use.” 

 

4. Don’t forgo credit cards

 

You actually need to have some past credit history in order for a bank or lender to calculate your credit score. If you don’t have enough information in your credit history, consider applying for a secured credit card, getting a credit builder loan, or becoming an authorized user on someone else’s credit card. 

 

Improving your credit score will take time and diligence! If you have previously had a low credit score, making payments and the passage of time will ultimately be what helps raise your score. 

 

For those that need a vehicle now, despite low credit, don’t worry. Mile High’s Colorado Springs dealership has been helping customers for 20+ years navigate the challenges of low-credit financing. We work with numerous lenders to find an option that will fit your financial situation best. 

 

We are dedicated to seeing you drive away in the car you want at a rate you can feel confident about, regardless of your credit status. And by paying on time each month, you will be building and improving your credit score behind the wheel of your new car. 

 

Unlike other Colorado Springs dealerships, your past credit history is not what we are most concerned about. We want to make sure you have a reliable vehicle with which to connect and contribute within our community, getting you and your family safely where you need to go. Not sure if you’ll be able to get financing? Apply right now through our easy online application and find out ASAP. 

 

Discover how Mile High Car Company is dedicated to you as a customer and fellow community member.

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