Summer is the season of sun, activities, travel and family fun. That could mean needing a loan for a new car, boat or RV to take that special vacation you have always wanted to go on. To obtain a loan, you need to avoid the dings and dents to your credit which can lower your score and making acceptance that much tougher.
We gathered some intel and included some tips from our Consumer Loans team to provide you with a few ways that you can work with us to keep your credit score acceptable and application process free of debris – especially if you want to take advantage of Mabrey’s Summer Loan Special on a new car, motorcycle, boat or RV.
Learn more: 2023 Summer Loan Special
1) Stay Responsible with Payments
Ultimately, the easiest thing to do to maintain and grow your credit score is paying the agreed upon amount of your loans each month for the duration of the loan. In this case, slow and steady can indeed win the race. Whether it’s your mortgage, car note or a credit card, showing past and present responsibility, consistency and dependability is what banks and credit bureaus are looking for when you apply for a loan.
If you have shown a documented history of responsibility with your money and the contracts you have signed to pay your loans back, banks will be much more willing to let you borrow more, if your monthly income can sustain payments. Paying off your credit card balances regularly, or at the least keeping your balances to less than 30% of your available credit can leave a paper trail of responsibility on paying your debts.
Helpful tip: Try setting up your loans on an auto-draft payment. The quickest way for the payment to be applied is for it to come from an account within the same institution, but there should be an option to set up auto-draft payments from another bank as well. If you prefer to make your payments manually, set calendar appointments to make sure you don’t miss them. Many times, lenders can select a payment date upon request so that it lines up with or is a day after you get paid.
2) Be Proactive with Communication
Being late on a payment, or missing one entirely, is a recipe for your credit score to fall. If you think you might not be able to make a payment on time, contact your lender in advance. Not only will this show a strong sense of accountability, but lenders will often work with you to avoid a dent in your credit score.
While communication with your lender is important, communicating with credit bureaus is another way to show you are proactive. You are allowed one free credit report every 12 months from each of the three major bureaus (Equifax, Experian and TransUnion). Requesting and accessing your reports will show you every peak and valley your credit score experienced throughout the year. Knowing this information can keep you from repeating mistakes that drop your score.
Helpful tip: Having past due payments can greatly affect getting approved for a loan in the future. Once you get behind, it can be hard to get caught back up again. Lenders are not just here to collect payments, we are here to help and guide you to meet your financial needs. Sometimes we can move a payment due date and sometimes we may need to defer a payment for you. Keeping us in the loop is best for both you and the bank.
Since you can order copies of your credit report from three bureaus, why not use that to your advantage and request those quarterly? Order from one in April, one in August and one in December. Just spread them out throughout the year so you constantly know where you stand, and you aren’t completely in the dark any time you apply for credit.
3) Get Ahead on your Balances
Staying ahead on your loans is easier said than done, but a little can go a long way towards boosting your credit score. Making a slightly larger payment on your due date, or submitting your monthly payment early are two good ways to raise your score. Be careful however, paying off a loan too quickly or with too large of payments can actually do more harm than good to your score. For more information on this, check out some basic Consumer Loan tips courtesy of our experts at Mabrey.
Helpful tip: Is your monthly payment $250? Pay $275. Is your payment due on the 15th of the month? Try paying on the 1st. Again, sometimes you can select a payment due date for your loan, so maybe select it later than you plan to pay it. These little adjustments can give the slight boost you need to your score that could be the difference between you qualifying for a special rate loan or not.