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April 17, 2019

How to Improve Your Credit Score Before Applying for an Ag Loan

Check out our tips for getting a higher credit score.

Your credit score–the three-digit number that relates to how likely you are to repay debt—is an important aspect of your financial future. After all, it determines whether you receive the loan you’re applying for and the rates you’ll pay. According to the financial experts at Nerd Wallet, the lifetime cost of higher interest rates from bad or mediocre credit can exceed six figures. On the other hand, borrowers can leverage strong credit scores for fantastic deals on loans, credit cards, and insurance premiums.

If you’re considering applying for a loan now or in the future, you’ll want to read on (and probably take notes on our credit tips as well). You’ll learn about ways you can grow and improve your credit score before applying for farm financing and agricultural land loans, as well as what sets AgAmerica Lending apart from other lenders in the marketplace.

How to Improve Your Credit Score(s)

You don’t have just one credit score, you have three, and they change regularly. A person’s scores differ based on the scoring formula used and which of the three main credit bureaus (Equifax, Experian, and TransUnion) supplied the information, or credit reports, used to calculate the score. Credit scores range from 300-850.

Your scores are typically based on factors like how often you make payments on time and how many accounts you have in good standing. It makes sense that the easiest way to ensure your credit scores are high is to pay your bills when or before they’re due—and note that just one skipped payment can knock more than 100 points off each of your scores. Fortunately, there are other ways to improve your credit scores before applying for a loan:

  • Use your credit accounts lightly but regularly, and know your credit limit on each card (Nerd Wallet recommends charging no more than 30 percent of that limit).
  • To stay on top of your spending and to ensure you’re not exceeding 30 percent of your credit limit, consider tracking how much you’re charging to each of your cards and setting up balance alerts. You can also ask for higher credit limits and find out when your issuer reports to the credit bureaus, but if that sounds like too much work, simply get into the habit of paying your balance twice per month rather than once.
  • Pay statement balances in full when possible, and if you do carry balances, try to pay them down quickly.
  • Avoid closing accounts. Once your scores are high—over 760 or so—you can eliminate an account or two without major damage, but it’s best to keep your highest-limit credit cards open.
  • Check your credit report for errors. You can get your credit report for free once a year at Review your full report and contest issues that are incorrect. This can also help you catch fraud and identity theft.

Credit Benefits of AgAmerica Lending’s Loan Program

When you choose AgAmerica to meet your agricultural financing needs, you’re guaranteed to be in good hands. We understand you’re not just your credit score and credit history, and we take several factors into account when evaluating a potential borrower including the 5 C’s: character, capital, capacity, collateral, and conditions.

In addition, AgAmerica offers a revolutionary 10-year line of credit. Unlike typical lines of credit offered in the ag lending industry, AgAmerica’s 10-year line of credit can provide unlimited cash draws, allows for interest-only payments, and 25-year amortizations to lower your payments. Moreover, it has no non-use fees, mandatory pay-down periods, or prepayment penalties. Plus, there are no annual paperwork renewals, and the line of credit can be coupled with a standard term loan for a lower “blended” interest rate.

Custom Ag Loans for Your Long-Term Operational Needs

Ready to apply for a loan with AgAmerica? We are proud to offer custom agricultural land loan packages that are designed to meet the unique needs of farmers, ranchers, and landowners, and our team of professionals are prepared to work with you to determine the best financial approach to position your operation for growth and long-term success.

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