Best Credit Score for Buying or Leasing Your Dream Car

Best Credit Score for Buying or Leasing Your Dream Car

Almost everyone needs a car in our daily lives whether to take you to work or to drive your kids to school. In most cities, it is essential to getting from point A to point B. If you don’t have one yet, you might be wondering whether it’s better to lease or buy one outright. 

However, before making any large purchases like a vehicle, it’s helpful to know your credit score so you can find out what kind of loan you can get approved for and what kind of interest rate you will be dealing with. 

In this article, we look at the credit scores you need to lease or purchase a vehicle so you can better plan to get your dream car. 

 

What Credit Score You Need To Lease A Car

Stated by a credit repair Dallas expert, the advantages of leasing a car versus buying one outright are that you generally get lower monthly payments. Some experts say you can get anywhere from 30% to 60% lower payments versus buying a car. Another big advantage is that you have warranty protection for the entire time you drive the car. 

However:

Leasing a vehicle is like buying because you still need a decent credit score. According to Nerdwallet, “the average score for customers staring a new lease was 722. If your score is 680 or above, you’ll likely have attractive offers.”

Credit scores above 740 are considered excellent by lenders, and those with scores 740 and over get the best rates and deals regardless of whether they purchase or lease. 

But, what if your score isn’t so hot? 

Well, according to LeaseGuide.com, if you have a score between 620-679, you’re still in the ballpark for getting a lease. However, while you’re more than likely to be approved with those numbers, you may get a higher interest rate.

Now, if your score is below 619, it’s considered ‘sub-prime’ or fair credit. If you have a score in this range, you may or may not get accepted to lease. And if you do, you’ll likely pay a high-interest rate. 

If you have a sub-prime score, you’re better off taking a few months to improve that number before you go shopping for a new vehicle, if you can. Keep in mind that lease requirements always change and vary among auto manufacturers. It’s important to note that market conditions play a factor in whether or not you get approved depending on your score. 

credit for car loan

 

Credit Score For Buying A Car

Buying a car has its own advantages over leasing. While you do pay higher monthly payments, you have the benefit of owning a vehicle when you’ve paid it off, and can sell the vehicle when you choose to get another one.  

Also, you have the advantage of being able to modify the vehicle if you want without the fear of breaking a contract. 

But buying a car is similar to leasing because you still need to have a decent credit score to get a loan. Again, according to Nerdwallet.com, “the average credit score to buy a new car is 713; it’s 656 for a used-car loan.”

If your score is in the low 700s or below, expect to have a difficult time getting a loan. You’ll probably have to answer questions about negative entries in your credit report and have to jump through hoops to prove your income and verify payment history.

While it’s possible to get an auto loan with bad credit, which is defined as a score below 600, it’s unlikely. And if you do get approved, you’ll pay very high-interest rates. 

As with leasing, if your credit score is bad, you’re better off spending six months to a year rebuilding your credit score back up if you can afford to wait. 

 

How To Improve Your Credit Score

As you can see, having a good credit score is essential to getting good terms on a lease or car purchase. But if you have less than perfect credit, all hope isn’t lost. There are steps you can take to beef up your score and it doesn’t take as long as you may think.

To know what your credit score means, it’s helpful to know how that number is calculated. Credit scores are three-digit numbers that help lenders know how credit-worthy you are. There’s no uniform algorithm that’s used by everyone, which is why you may have different scores from different reporting agencies. 

Credit reporting agencies look at a variety of factors to come up with that number, including your payment history, your credit usage, whether your accounts are delinquent, etc. 

improve credit for carFirst and foremost:

The number one thing you can do to improve your score right away is to make your payments on time from now on. Your payment history is the biggest factor that goes into your credit score. Even if you’ve been late before, start making every payment on time even if it’s the minimum. 

The next thing you can do to improve your credit score is to pay off your debts and credit cards. The debt to credit ratio or credit utilization ratio is the second biggest factor that goes into your credit score. Do everything you can to bring down those credit card and loan balances quickly to send your score in the right direction.

Another way to better your score is to not take on any more debt if you can afford it. It seems counterintuitive since you’re trying to take on a car loan, but when you apply for new credit, your score takes a hit. That’s why it’s best to get your score as high as you can before taking on a car loan or lease payment. 

The bottom line to take away from this article is that your credit score is very important whether you want to get an auto loan, home loan, or any other type of credit. If you’re in the market for a new vehicle, your best bet is to examine your credit to see where you stand. 

Then, if you think you need to make improvements, do so first before you attempt to get a loan. Getting a loan with a high credit score gives you more favorable terms and makes it more likely you’ll be approved. 

Credit Cards & Interests Rates: How One Affects The Other

Credit Cards & Interests Rates: How One Affects The Other

Having good credit and a good credit score is important to your financial well-being and your life. Having credit allows you to purchase things you need, such as homes and automobiles and can even help you get an apartment or a cell phone contract. Your credit history and your score affect your ability to borrow money, and it affects the interest rate you’ll pay, which can make it easier or harder for you to pay off your loans. 

In this article, we look at why having a good credit score is important, and how your score affects your interest rate.
 

What Is Your Credit Score?

Your credit score is a number that’s derived from your credit history. This number tells lenders how much of a risk you are when deciding to lend you money or extend lines of credit to you. 

Since this number is one of the main factors taken into consideration, you need to work hard to maintain a good credit score, because having bad credit lessens the chance you’ll be able to borrow money, and increases the chance of borrowing money with unfavorable terms. 

 

How Companies Determine Credit Scores

The information in your credit report is what’s used to determine your credit score, and it’s vital you understand what information credit reporting agencies consider so you can take steps to improve your score if needed.

There are 5 pieces of information that determine a credit score: Payment History, Amount Owed, Credit History, Types of Credit, and New Credit. 
 

Payment History

Your payment history comprises the largest percentage (40%) of your credit score. The information a credit reporting agency uses to factor in payment history is the number of accounts you have versus how many payments you’ve made on time. 

Also:

The number of accounts that are 30 days or more delinquent factors into this. 

Reporting agencies take into account whether you’ve filed for bankruptcy or had an account go into collections. Making every payment on time is the most important thing you can do to maintain your good credit and to build it up if it’s not where you want it to be.
 

Amount Owed

The next factor that goes into your credit score (30%) is the amount you owe on your accounts. The credit reporting agency looks at your spending habits and the amount of money you owe to determine if making payments is sustainable should you encounter financial hardship. Factors that determine the amount owed are the number of accounts in which you have a balance, how much credit you’ve used, and how much you owe on all of your cards and loans. 

As with making on-time payments, paying down debt goes a long way to improving your credit score and is easy to do if you pay more than the minimum payment every month. 
 

Credit History

How long you’ve had credit cards and other forms of credit is another factor that goes into your credit score. For example, if you have, say, five years of on-time payments with a credit card, it looks better than if you only had an account for a few months. The longer your credit history, the better the risk you’re seen as for lenders

Therefore, it’s important you keep your old credit cards instead of cutting them up. Use them for small purchases to keep them active and pay off the balance at the end of the month to maintain a long credit history.  
 

Types of Credit

Lenders like to see a variety of credit accounts, which is why you should have loans, retail cards, and bank cards instead of only credit cards. Having more variety in your types of credit shows you’re a well-rounded borrower. 
 

New Credit

The last bit of information that credit reporting agencies consider when determining your score is the new lines of credit you opened up recently. Factors in this include how long it’s been since you’ve opened a new account, the number of ‘hard pulls’ to your credit you had in the last year, and how long it’s been since you last had an inquiry into your credit report. 

interest rate for credit card
 

Credit & Interest Rates

Now that you know about what makes up your credit score, let’s look at how that score affects your interest rate. 

Lenders & Numbers

So, when you apply for credit, your lender looks at the credit score given to them by one of the major credit reporting agencies. Credit scores usually range from 300 to 850 and the number that comes back to the lender affects the interest rate they’ll offer.

A high score tells the lender you’re low risk and that you’ll most likely make payments on time and won’t default on the loan. This means you’ll usually get a lower interest rate, and some lenders may reduce the amount you have to put down for a mortgage or an auto loan. 

However, lower scores (usually below 620) means you’ll probably get a high-interest rate or may not get a loan at all. Many lenders look at scores above 670 to be good, so if you’re below that, you’re better off improving your score before you apply for a loan. 

 

Building Your Score

Let’s say your score is less than perfect, and you want to get a mortgage or car loan. As mentioned, you’re better off improving your credit score before applying for a loan to get better terms and here’s how to do that.

  • Make your payments on time. Even if you’ve missed in the past, start making them on time every month from here on out.
  • Reduce the credit to debt ratio to be 30% or lower.
  • Pay off your high balances as quickly as possible; make more than the minimum payment to do this.
  • Get a copy of your credit report and make sure there are no errors that can drive your score down.
  • Get help from a credit counselor to help rebuild your credit.

Many people get into trouble with credit because they don’t understand how it works. If you can avoid it, don’t carry over balances from month to month. Be smart about using your credit, make your payments on time and you should have no trouble when it comes time to get a mortgage or loan. 

Thinking of an Apartment or Home in Austin? Here Are the Credit Scores You Need for Good Terms

Thinking of an Apartment or Home in Austin? Here Are the Credit Scores You Need for Good Terms

So, you’re thinking of buying a home or renting an apartment in the Austin area? Are you moving into Austin and need a place to live? Well, the housing market here is robust, but getting a good deal on an apartment or favorable terms on a home loan depends on having a good credit score

This article will provide a picture of what the Austin home market is like, and what kind of credit score you might need to get a place you’ll love.

Current Housing Market in Austin

Stated by credit repair Austin experts, while housing prices across the country are dipping as of 2019, and properties are lingering on the market longer than before, some local markets are thriving, which means there’s fierce competition for buyers and renters alike. 

The real estate market here in Austin is one such market, and it ranks as one of the hottest in 2019 and looks to get even better in 2020. According to Zillow, median home values in the Austin area grew by over 6% as of June 2019, and most experts expect that growth to continue, albeit more slowly, over the next year.

 

Because of a thriving job market, values for homes in Austin have continued to grow since 2012, and while this trend is the same for many major metro areas, Austin is one of the strongest. 

While many homes stay on the market longer in other areas — some up to 50 days or more — here in Austin, the average time for a home to be on the market is 12 days, which indicates a healthy housing market with a lot of potential.

One of the major driving factors in the Austin housing market is the incredible population growth as it ranks consistently as one of the best places to live.

Another factor that drives up value here in Austin is the supply/demand ratio when compared to other cities in Texas. 

According to the Home Buying Institute:

As of May 2019, the Austin area had less than a two-month supply of homes for sale. A “balanced” real estate market has closer to five or six months worth of supply. 

austin housing market

What About Affordability?

With a population that’s growing and an economy that’s booming, it’s no surprise that homebuyers and apartment hunters are concerned about affordable housing. 

Although home prices in Austin are climbing and continue to climb, many experts say Austin is still one of the more affordable places when compared to more saturated markets like San Diego and Seattle.

Still, experts advise that if you’re planning on relocating to Austin, you’re going to have your work cut out for you because there is a high demand and low inventory. 

The competition for housing is fierce, which is why it’s advised that you start looking for a house or apartment as soon as possible to give yourself plenty of time to find the right place at the right price. 

Since homes do not sit on the market long in Austin, deciding to wait or ‘think about it’ may mean losing a property to someone else who’s ready to buy. 

Lastly, take advantage of low mortgage rates, which have decreased dramatically over the last few years. The average rate for a 30 year fixed mortgage loan decreased to 3.8% as of June 2019. But to get these low rates, you’re going to need a good credit score, which takes us to the next topic.

What Credit Score Do You Need For A Home in Austin?

So, if you’re looking for a home, it’s essential you examine your credit score before you apply for a loan. Your credit score is a significant determinant factor in whether or not you get a loan and what terms you get with interest rates. 

credit score for austin homeThe higher your score, the more favorable terms you’ll get, and the lower the down payment you’ll need.

While there are a variety of home loans you can apply for, in general, the average credit score for Texas first time home buyers is 671, according to Credit Karma. However, the credit score you need depends on the type of loan you’re getting. 

For example:

With an FHA Loan, you may be able to get that with a score of 580 or above. A VA Loan can be had with a score of 620 or more. A USDA Loan can be gotten with a score of 640 or above, and a conventional loan can be gotten with a score of 620 or above.

What About Renting?

If you’re interested in renting an apartment, your score is still important, but not as much as when you’re getting a loan. Most people or companies who are renting out apartments will expect you to have a score of 620+. 

However, because Austin is a hot market, and demand is high, rental companies and landlords may want to see scores over 700.

While landlords differ in what they look for, generally speaking, they want to know about your income and your credit history to show them you have the money to pay your rent and you’re responsible for making your payments on time.

Just like a low score may get you denied for a home loan, so too will a low score get you denied for an apartment.

Because your credit score is so important when renting or buying, it’s essential that you do all that you can to improve your credit score if it’s not where you want it to be before you begin shopping. 

The best way to improve a low score is to start making all of your payments on time and pay off your debt as quickly as possible. If you need help, contact a credit repair company to get you back on track to get you into the home of your dreams.

 

How Your Credit Score Affects Home Loans For The Dallas Housing Market

How Your Credit Score Affects Home Loans For The Dallas Housing Market

By now, everyone should know that your credit score plays a crucial role in deciding whether or not you get a home loan and how favorable the terms are to you. Dallas continues to grow, and the job market is booming.

In this article, we look at the current state of the housing market in Dallas, what it may look like in 2020, and how your credit score affects your chances of getting a home loan on good terms.  

 

 

Current State Of The Dallas Housing Market

Home values took a slight dip back in April, which many experts attribute to value decreases in the West Coast markets. The net effect of that is that housing prices decreased in the Dallas-Fort Worth area as well. While the drop in prices is relatively small, (0.1%), it points to changes coming to the housing sector.

According to Zillow, housing prices in the Dallas-Fort Worth area dropped slightly back in April, which is the first decline reported since January of 2012.

Also, the information provided by Dallas-Fort Worth real estate agents suggests a month-to-month decline in median home prices.

According to Dallas News

So far in 2019, the median sales price of single-family homes sold by agents in North Texas is up 2% from the first four months of 2018. Zillow said that in April, the “typical U.S. home is worth $226,800.” That’s less than the $243,900 value in the DFW area.

While the housing market is slowing, with the average number of days on the market at about 53 in the North Texas region, experts caution people to not panic just yet because overall, home prices are increasing.

While Zillow says the Dallas market is “cool” they also call for a 7.5% rise in the median home price in 2019, which puts the market on an upward swing.

DM Magazine says: 

The reason for that is simple. There are jobs here, and tens of thousands of people are still moving to this area looking to land those jobs. The Bureau of Labor Statistics says 102,500 new jobs were created in 2018. There are now 3.7 million people in this area going to work every day.

The jobs are here in Dallas, and Texas continues to lead the country in job creation, so the housing market, for the time being, is healthy. If this competitive market worries you’re you about not being able to afford a home, you still have the option of getting something cheaper as you move away from the downtown area.

Affordability isn’t just a problem here in the Dallas area, but throughout the major markets around the country too. Generally speaking, the further away you move from the major metro areas, the better the deals you can find.

 

Predictions For 2020

While the above data paints a conflicting picture, what can be predicted for the housing market in the Dallas Fort-Worth area next year is that the low inventory and high demand will keep the market very competitive for the next few years. 

The strong economy here is giving the real estate market a healthy boost, which should keep prices from dipping too much in 2020. Lastly, according to the experts at Zillow, they predict a gain of 4.8% in the market through the summer of 2020.

As you can see, there’s no reason to panic right now, as the market looks strong throughout the better part of next year.

credit score in dallas

 

Credit Scores & Your Home Loan

If you’re not familiar with how credit scores work, here’s a brief rundown. Credit reporting agencies determine your credit score based on a few factors, including:

  • Your credit to debt ratio
  • They type of credit you have
  • Timeliness of payments
  • If you’ve filed for bankruptcy

Credit reporting agencies look at this information and derive a number that gives lenders an idea of your creditworthiness. 

The typical FICO score breaks down like this: 30% is based on how much you owe; 35% is based on your payment history; 15% is based on the length of your credit history; 10% is based on new credit you’ve acquired, and 10% is based on the types of credit you have.

Your credit score not only tells the lender whether you’re worthy of credit or not but also the interest rate you pay. A high credit score usually means a low-interest rate, while a low score means a high-interest rate.

Lenders differ on what they consider the baseline for good credit, but in general, a score of 700 or above is deemed to be excellent and will net you the most favorable terms. Once you dip down into the 600s, lenders see you as a high risk. For some lenders, a score of 660 or below is a ‘no’ for a loan, so this is why it’s imperative you maintain a good credit rating.

 

How To Fix A Bad Score

So let’s say you want to buy a home, but your credit score won’t allow you to get a loan or will get you one on terrible terms. What can you do to fix it?

The first step is to:

Get a copy of your credit report to make sure there aren’t any errors that are dragging your score down. 

Next, the most important thing you can do to get your score moving in the right direction is to pay every bill on time. Making timely payments is the quickest way to improve your score. Remember to pay down debts quickly, which often means making more than the minimum payment each time.

As you can see, your credit score is essential to getting a home loan on good terms. And, if your score isn’t where it should be, you’re better off holding off on getting a loan until you can improve it. If you need help, contact a credit repair Dallas company to get you back on track and into the home of your dreams.

 

What Do Landlords Look For in a Credit Score?

What Do Landlords Look For in a Credit Score?

Whether you’re applying for a loan or an apartment, at some point, the state of your credit will likely matter. Before entering into a monetary arrangement with a customer, a lot of businesses and business owners will check your credit.

As important as your credit is, a lot of people know very little about credit and how it works. That’s why we’re going to break down a few of the most common questions regarding credit, credit scores, and why they’re checked.

What is a Credit Score?

Your credit score is an average score based on your credit history. This credit score is affected by several factors, the biggest of which is your payment history. Your payment history is basically a record of your payments that takes into account whether or not they were made on time.

What is a Credit Check?

Simply put, a credit check is a report to understand your financial behavior. It can show if you paid back your credit on time, how much credit you currently have and how well you are managing it.

A company doesn’t need your consent to do this, but they must have a legitimate reason for looking it up.

Who Can Check My Credit?

Anyone from banks, credit providers to landlords, and even employers can run a credit check. However, to do so they’ll need the right information. To check someone’s credit you’ll need their social security number, address, and employment information. This is why landlords will often ask for this type of information on the rental application.

Why Do Landlords Run Credit Checks?

When it comes to renting to a potential tenant, landlords want to make sure the applicant is dependable. Late payments and broken leases can be a real inconvenience for landlords, so they typically avoid situations like as much as they can by choosing less “risky” tenants.

To avoid entering into a contract with someone that regularly submits late payments, Landlords will often run a credit check. While your credit is mostly determined by your payment habits, several other factors can affect your credit score.

What’s Included in a Credit Check?

A lot more than your credit history goes into a credit check. In addition to credit-related payments, a credit check will provide your potential landlord with a history of your finances, criminal convictions, and lawsuits.

Additionally:

A credit check will provide your potential landlord with information regarding your financial stability. They can check your employment status as well as your income during the screening process.

A credit check will also provide landlords with information regarding their applicant’s debt. However, debt doesn’t usually play as big a part in the landlord’s final decision. Typically, they’re more interested in your income and your credit.

What Do Landlords Look For in a Credit Check?

Different landlords have different standards when it comes to who they’ll sign a lease with. In some cases, landlords won’t even run credit checks, although most choose to do so.

Landlords have the right to refuse an application due to criminal convictions. However, according to the law, they aren’t supposed to let an arrest affect their decision unless that arrest was followed by a conviction.

When it comes to a credit check, the two biggest factors for a landlord are your income and your credit history. Landlords typically want to make sure you make enough money to pay them. Furthermore, they want to make sure you have a habit of paying your bills on time.

Landlords and Credit Score

 

What Are Some Dealbreakers for Landlords?

Again, different landlords have different standards when it comes to what they would consider a dealbreaker.

Most landlords want to rent to tenants that have a credit score of 620 or higher. A credit score lower than 620 might be a dealbreaker for some landlords. Similarly, past evictions are another red flag that landlords will often take into consideration.

A credit check doesn’t provide your landlord with information regarding past evictions. However, they can find out about evictions through other means. While a single eviction might not be a dealbreaker for a landlord, it’s still a red flag that will likely affect their decision.

Another potential dealbreaker for landlords is the applicant’s income. Your potential landlord wants to make sure that your income is substantial enough to cover the cost of your rent.

How Do I Check My Credit Score?

Checking your credit is particularly easy. All you’ll need is your social security number, address, and employment information. However, you should be very careful when it comes to giving your social security number. Be sure to only check your credit score with trusted platforms.

One of the most commonly used and trusted credit check sites is Experian. To check your credit, just click the link! It’ll redirect you to Experian’s online credit check.

A Good Credit Score is the Key to Financial Freedom

At the end of the day, having good credit mostly comes down to paying your bills and rent on time. There are a few other ways to increase your credit score. However, as long as you live within your means and spend responsibly, your credit score will usually be okay.

If you’re worried about what a potential landlord might find on your credit report, look first. You’re entitled to a free annual credit report. Plus, there are several ways to check your credit for free online.

You can’t control how a landlord or property manager might interpret your credit report, but if you know what’s on it, you’ll be more prepared to answer any questions they might have.
 
 

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Credit Limits: Can Yours Be Reduced?

Credit Limits: Can Yours Be Reduced?

Having your credit limit reduced is common and can even happen if you’ve been good with credit and made all your payments on time. When a creditor lowers your credit limit, it can negatively impact your credit score. However, you need to know that there are things you can do – by yourself and with the help of a credit repair company – when this happens to minimize the damage to your credit and to fix the problem

Why Would a Credit Limit be Reduced?

So, you received a message from your credit card company notifying you that your credit limit has been lowered. It happens all the time, and while it’s frustrating because it limits your purchasing power and harms your credit score, you don’t have to sit around and accept it.

Why Would a Bank Lower Your Credit Limit Anyway?

During times of financial crisis or recession, banks may evaluate outstanding risk, which is often unused credit. To minimize the risk to banks in uncertain economic times, the bank may choose to slash your credit limit in the event you decide to use your card more and wind up not being able to pay because of financial circumstances.

It’s important to remember that credit limits aren’t a right, nor are they guaranteed; a bank can reduce your credit limit at any time, and they don’t need to give you a reason. You did read the fine print when you signed up for your card, didn’t you?

Also keep in mind that the reduction of credit limits is usually made by an algorithm rather than a human being sitting down and assessing your financial health, payment history, and credit.

Another reason a bank or credit card company might lower your limit is because of ‘low usage.’ If you have a limit of $20,000 and you’re not using a fraction of that, the bank may alter your limit to reflect your usage pattern.

Does it Matter if Your Limit Is Lowered?

In a word: Yes. When a bank lowers your credit limit, it immediately affects your buying power and the amount you’re allowed to borrow. Also, a reduced credit limit can affect your credit score by increasing your overall credit utilization. For example, let’s say you had a limit of $20,000 and only had a balance of $5,000. You’re only using a quarter of your credit, which looks good on your credit report. However, if the bank suddenly slashes your credit limit to $10,000, now you’re at the half, which looks terrible and reflects poorly on your credit score. Credit utilization accounts for 30 percent of your credit score, so it’s easy to see how a lowered credit limit can reduce your score.

Now, it’s important to remember that while a bank can reduce your credit limit for any reason, what they can’t do is cut it and then hit you with an over-the-limit fee if you’re currently above your new limit. The bank is required by law to give you at least 45 days from the time they notify you about your lowered threshold before assessing any fees.

credit limit lowered

What to do if Your Limit is Lowered

Most people assume there’s nothing they can do when they get notified that their credit limit has been lowered, but that’s not the case. The first thing you can do is to contact your creditor and ask to speak to a representative. Remember, most times the limit was lowered by a computer algorithm rather than a person, so talking to a live rep is an excellent way to get answers as to why this happened, whether it was an error, and if your old limit can be restored. Remember to be polite when you call, and it never hurts to mention how long you’ve been a customer and never missed a payment if that’s the case.

If you’re new lowered limit has put your credit utilization in a bind, consider transferring the balance to a card with a higher limit. If you’ve been in the market for a new card, now is the time to go on the hunt to find one with zero percent interest for balance transfers. Just keep in mind that opening new lines of credit can cause your credit score to take a hit too.

What you don’t want to do is to close out your old card to spite the bank because if you have a long credit history there, that’s going to reflect negatively on your credit score if you wipe out years of on-time payments. Also, closing out that account lowers the available credit you have to work with, so transfer the balance, and suck it up. If you maintain good relations with that bank and continue to make on-time payments, there’s a good chance you can get your limit raised in the future if needed.

It’s also essential you monitor your credit reports when a limit gets lowered to see what kind of a hit you take. If your score does drop, you can take the necessary steps to build your credit score back up such as using your card for small purchases like Netflix or coffee and paying it off every month to keep the account active and in good standing.

Finally, paying off your balance quickly on the card that got hit with the lower limit goes a long way to bringing down your credit utilization and pointing your credit score in the right direction.

Having your credit limit lowered isn’t a reflection on you or your credit, so don’t it personally. These things happen to everyone; you have to be smart about how to handle it and roll with it until you can get yourself straightened around.

Make your payments on time and pay down your balances to ensure your credit score moves up. And keep in good standing with your bank that lowered your rating in the hopes it can be restored in the future.