Check Your Credit Report & Fix Any Errors

To get started, find out where your credit stands by requesting a credit report. This will help you understand how much your score needs to improve. You can request a free copy of your credit report from the three major credit bureaus: TransUnion, Experian and Equifax. If you check your reports and notice an error that is causing your score to be incorrectly low, you can dispute the error with the bureau the report came from. If you notice multiple errors, each will have to be disputed separately

Confused about how credit scores are calculated, or what’s a “good” score? Don’t worry: The scoring isn’t too complicated. Your score will fall between 300-850, with 300-629 considered a poor score, 630-689 considered a fair score, 690-719 considered a good score and 720 and above considered an excellent score. The two most common scoring models used by lenders are VantageScore 3.0 and FICO® Score 8. While factors that affect credit scoring differ between models, the most common are payment history, credit utilization, length of credit history, mix of credit types and recent applications.

Make Payments on Time

Paying your bills on time is arguably the most important way to improve your credit score. About 35% of your credit score is based on your payment history, so it’s crucial to keep up with your payments. Being 30 days late will put a dent in your credit score, and the later you are after that, the worse the damage will get.

If you have trouble remembering your due dates, try enrolling in automatic payments so you don’t have to stress. You can also set up phone reminders so you get a call when your bill is nearly due. Since so many bills can be paid digitally these days, there are lots of helpful, automated tools to help you make sure you never miss a payment again.

Stay Below Your Credit Limit

If you have a credit card, keep an eye on the amount of your credit limit you are using. 30% of your credit score is based on your credit utilization, so do your best to stay well below your limit. If possible, use no more than 30% of your available credit. If you have already used a large amount of the credit available to you, don’t panic: damage to your score from credit utilization is reversible. Once you pay down the high balance you owe, your credit score will improve.

Be Patient

Sometimes waiting is all you can do, despite fixing credit report errors, paying bills on time and being careful about your credit limit. Time will help heal your credit score, and the more time you spend making on-time payments and practicing healthy spending habits, the better your credit will become. It takes patience, but it’s worth it! Once your credit score has improved and you’re ready to get started on your path to a new vehicle, our finance team can help you finalize your purchase and drive home in a new Honda. We can’t wait to help you make owning your dream car a reality!