If your credit score is holding you back from getting the bike of your dreams, here are some tips on how you can build your score and achieve your dream of owning a Harley-Davidson! Please note that every situation is different, and Timber Town Harley-Davidson cannot be responsible for your results. However, during my time in the consolidation industry, I found the advice below to be effective for most people. If you have any questions, please feel free to email me at firstname.lastname@example.org.
Wishing you the best,
Sr. Business Development Manager, Timber Town Harley-Davidson, Certified Debt Specialist, IAPDA, International Association of Professional Debt Arbitrators.
Types of Credit:
- Unsecured: these are accounts not secured by specific assets, e.g. credit cards, personal loans, store cards, etc...
- Secured: these are accounts secured by assets (“collateral”) that can be repossessed if the loan defaults. These include loans for your bike, car, mortgage, etc...
What Makes a Credit Score?
- Makes up 35% of your overall score.
- Do your best to make every payment on time and make as many full payments as possible.
- Many consumers pay a small amount on each card, however, doing so will not help your score. Partial payments are still considered late payments and reflect negatively on your report.
- Make sure you pay your secured accounts first! Delinquencies on secured accounts can lead to repossession or foreclosure. This will only make things harder!
- ==>>If you currently own a motorcycle, good payment history with your lender is extremely helpful when trading up!!!
- Makes up 30% of your overall score.
- Credit utilization is the revolving credit you’re currently using divided by the total amount of revolving credit you have available.
- For example: if you have used $3,500 on a card with a $5,000 limit, and owe $2,000 on a $3,000 personal loan, your utilization would be 68.75%. This is calculated as ($3500+$2000) ÷ (5,000 + 3,000).
- Your ideal credit utilization should be between 10-20%.
Length of Credit History:
- Makes up 15% of your overall score.
- Most consumers think this applies to keeping an account open for an extended period, however, that’s not really the case today. The credit bureaus understand that the credit card industry is competitive, and consumers no longer have as much brand loyalty. It’s expected that a consumer will periodically switch cards as their situation changes. **Please note, applying for new credit cards will cause a “hard inquiry.” Hard inquiries are specific requests to credit bureaus for reports on your credit, which usually require your social security number. These have a negative impact on your score, so I recommend only applying for cards that offer lower interest. I’d also read through the requirements for qualifying before applying. You can then go on Credit Karma to see if you’re where you need to be (See below for more information on Credit Karma. CK does not run hard inquiries and it’s free!).
- Makes up 10% of your overall score.
- Credit card companies like to see that you’re in control of your credit. If you’ve applied for several loans in a short period of time, this is a red flag to lenders.
- Most applications for new credit will cause a hard inquiry, which lowers your score.
- Please note “Soft credit inquiries” such as those we use in our Shop By Payment feature on our website do not require your social security number and do not negatively affect your score.
- Makes up 10% of your overall score.
- On average, the credit bureaus like to see consumers with 1-3 secured accounts (car, motorcycle, home, etc.) and up to three unsecured accounts (credit cards, unsecured personal loans, etc.).
- You don’t need to have all the different types of loans but at least a bike/car payment and credit card are a great start!