An excellent credit score is crucial to get approvals for big loans. However, if you have a poor credit score or want to build it, you can use some smart tactics to strengthen it over time. One way is getting long-term installment loans in Layton, Utah, and repaying them on time. However, it is also essential to know that the impact an installment loan would have on your credit score can range from very little to zero. An experienced loan manager and credit planner can help you improve your credit score with the help of some types of installment loans.
Let us learn more about how an installment loan in South Salt Lake, Utah, can help repair your credit score!
What is an Installment Loan?
As the name suggests, an installment loan is a credit you take from a money-lending institute or traditional banks and repay in installments over a set period. You will also be paying interest on the principal amount in these fixed repayments. Installment loans in Orem, Utah, can be secured or unsecured.
- Secured installment loans: These types of loans have collateral to back you if you are not able to repay the amount owed within the loan term. The lender can seize this collateral and use or sell it to get their money back.
- Unsecured installment loans: These loans do not require you to submit collateral or any other financially valuable asset to the lender.
How Can Installment Loans in South Salt Lake, Utah, Help Improve Your Credit Score?
Some tactics that you can use to boost your credit score involve:
- Improving your payment history: Payment history, i.e., how timely you repay your installments, makes up 30% of your credit report. Taking no credit check installment loans in Utah and timely repaying your due amounts can improve your credit history.
- Lowering your credit utilization: The credit utilization rate accounts for 30% of your credit score. It refers to the amount of credit you utilize within a period. Generally, it is a good idea to keep your credit utilization under 30-40% of your entire credit limit. Fortunately, these are limited to revolving credit lines, and taking installment loans in Utah rarely has any effect on your credit score.
- Add to your credit mix: Most of us are used to credit cards. However, credit cards represent only a single type of debt — revolving credit. You can take an installment loan in Utah and other types of loans to add to your credit mix and improve your credit score. Remember, the credit mix composes 10% of your credit score. Hence, the more diversified it is, the more your chances of getting an improved credit score.
Taking various kinds of loans to improve your credit score is a time-tested and foolproof strategy. However, this only applies to you if you’re new to credit scores and/or are struggling with bad credit. Taking short-term installment loans from Liquid Loans will not affect your credit score as these aren’t reported to the credit bureau, and will help you take care of your expenses without spiraling into a debt trap.
About Liquid Loans-
Apply for a no credit check loan in Utah and get approval within seconds at Liquid Loans with our quick loans in Salt Lake City. We offer a variety of financial solutions to cater to each customer’s individual situation and needs. Our premier financial product is the installment loan with low-interest rates and quick repayment plans. Other loan solutions to help you achieve a debt-free life include personal loans, installment loans, signature loans, title loans, and payday loans in Utah. Please visit our website to access the loan application or to gather further information about our personal loans with no credit checks.