September 20, 2021How to Boost Your Credit Score for Better Rates

It’s usually not until you apply for a loan that you realize just how valuable an excellent credit score can be. Lenders typically price loans based on your creditworthiness. Lower credit scores lead to higher interest rates. The difference between a C and B credit score, or B and A, could mean saving hundreds, or possibly thousands of dollars in interest, depending on the size and length of the loan. 

You may feel that lenders are punishing you, but the reality is that financial institutions are trying to protect themselves from potential losses. Your credit score gives them a bird’s-eye view of your money management abilities. Lenders will perceive you as a higher risk if you struggle to manage your money or make payments on time. 

However, just because you don’t have perfect credit now doesn’t mean you can’t take advantage of the best loan rates. With a bit of planning and preparation, it’s possible to boost your credit score in a few months with these tips. 

1) Review Your Credit Report 

Before you apply for a loan, it’s smart to review your credit report. Knowing where your credit stands will let you know whether you should apply now or if you have work to do. One of the first steps you should take to improve your credit score is to check for possible errors or fraud on your report. Unfortunately, while many apps and websites allow you to view your credit score, most do not show your entire credit report.  

Visit to receive a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion). Review each thoroughly for errors or fraud. Clearing up any discrepancies will help increase your score rather quickly. 

2) Update Your Budget 

Next, spend time reviewing your finances thoroughly. Your goal is to identify any financial challenges you face that lead to drops in your credit score. Here are some questions to ask yourself: 

  • What is causing you to have a lower credit score?  
  • Is it late or missed payments? 
  • Do you have a significant amount of credit card debt? 
  • Are you struggling to make ends meet regularly?  

Once you understand what is causing your score to decline, you can begin working to fix it. First, adjust your budget as necessary to pay down unsecured debt (credit cards) and avoid missing any payments. Small changes can lead to significant increases in your score. Keep in mind that budgets can be adjusted as time passes. So, making short-term sacrifices to improve your credit score doesn’t mean they are permanent.  

If you can’t find ways to improve your budget or financial standing, our partners at Knowledge of Financial Education (KOFE) offer free financial counseling. Consider speaking with one of their certified counselors, and they may give you the insight you need to manage your money more effectively. To learn more, visit 

3) Talk to Us 

Credit scores range between 300 and 850, with scores above 740 typically being considered excellent. However, the credit tiers and interest rates offered can vary by institution. It’s difficult to know exactly what credit score you need unless you ask. 

In addition to giving insight into credit tiers, our loan officers will review your credit report with you if asked. This will help you identify areas for improvement, including additional solutions, such as debt consolidation or loan refinances.  

4) Find a Co-Signer  

A co-signer is someone, usually a parent or close relative, who agrees to pay back the loan if you are unable to make the payments. Also, a co-signer with a high credit score gives the lender a more positive outlook toward approving the loan.  

However, it’s important to understand that asking someone to be a co-signer is a significant risk for that person. If you can’t repay the loan, then your co-signer’s money and credit are now on the line. A common example of a co-signer is a parent helping their adult child buy their first car. Since the child may have little to no credit history, getting a loan may be hard. With the parent as a co-signer, there is less risk for the lender. However, if the child can’t repay the loan, the parent would be responsible for making the car payments each month.  


We’re Here to Help!  

Simple changes in your credit habits over a few months could give you a much-needed boost in your score to qualify for lower interest rates. But it all starts with planning and preparation. If you’re interested in learning ways to improve your credit score or are considering a loan, we’re ready to help. Please stop by any of our branch locations or call (800) 226-6673 to speak with our lending team today. 


Each individual’s financial situation is unique, and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; it does not constitute legal advice. If such advice or a legal opinion is required, please consult with competent local counsel.  

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