A good credit score is an important aspect of personal finance and can help you access various financial products, such as a credit card or a mortgage. Likewise, if you have a low credit score, it can be challenging to get approved for financing. Some loan products, however, can actually help you improve your credit score and increase your options.
How do loans help improve your credit score?
Your credit score is a three-digit number that represents your creditworthiness based on your credit history. It is calculated based on various factors such as payment history, credit utilization, length of credit history, types of credit accounts, and new credit inquiries. When you use loans, it can positively impact your credit score by:
Different types of loans to improve your credit score
Keep an eye on your credit score and credit report to see the impact of your loan on your credit history. Check the information on your credit report periodically to make sure it’s accurate since mistakes on a credit report can bring down your credit score. Dovly is an AI credit engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.