Do you still think that your credit score is not in your control? It’s time we change that. Good or bad credit scores are both in our hands. After all, your credit score is simply a mirror of the information in your credit report, which is, in turn, a reflection of how you manage your debt. You cannot reverse what you did in the past to lower your score, but you can take steps to enhance it today.
Can Installment Loans Improve My Credit Score?
You can increase your FICO score by taking out personal installment loans in Houston, Texas. Unlike short-term payday or title loans, installment loans are intended to be repaid in a series of straightforward, manageable payments during the loan’s duration.
While you should not take out an installment loan solely to build credit, if you require an emergency financial solution, building credit can be an added benefit of an installment loan.
Here are three ways a safe, reasonable installment loan might help you boost your credit score.
1. Mastering the Art of Credit Mix
When FICO calculates your credit score, they categorize all of the information on your credit report into five categories. The most essential areas are “Payment History” (35% of your score) and “Amounts Owed” (30%).
However, “Credit Mix” is one of the other three factors that determine 10% of your score. The term “credit mix” refers to the various types of debt you owe, including credit card debt, personal loan debt, college debt, auto debt, mortgage debt, and so on. The more diverse your credit mix, the higher your credit score.
If you have a lot of credit card debt, taking out a loan to pay off some of your debt can also help improve your credit report. The combination of these multiples can help improve your credit.
2. Owing Less Debt as the Game-Changer
Do you know what’s an excellent way to improve your credit score? You owe less debt. (Shocking, we understand.) And do you know what a wonderful technique is to reduce debt? Get a lower interest rate. The less you pay in interest, the less you’ll pay in total, and the sooner you’ll be able to pay off your debt.
However, getting a lower interest rate isn’t the only way to pay less with an installment loan. You see, the longer any debt is outstanding, the more interest you’ll pay in total. The shorter the loan, the lower its cost. Most installment loans are designed to be repaid over several years, with the borrower just making the minimal payments.
3. On-Time Payments Boost Your Credit Score
As you recall, your payment history accounts for 35% of your overall score. This certainly means that completing your installment loan payments on time every month will help to improve that portion of your score. If you have a poor track record of making on-time payments, starting over may be beneficial!
All of it depends on your lender actually submitting your payment information to the credit bureaus. If you have bad credit, you may be dealing with lenders who do not record any payment information. This is particularly true for most payday and title lenders.
Same-Day Installment Loans with Bad Credit Made Easy
If you want to get installment loans in Houston, Texas, the same day with your bad credit score, contact Advance Paycheck Online. We offer same-day installment loans and no credit checks online for customers in need of quick financial assistance in the United States.
