Useful Ways To Improve Your Credit Score
If you apply for any forms of or types of credit, the creditor will surely obtain an assessment of your creditworthiness through your credit report as well as your credit score. This is the usual S.O.P. of most creditors to determine your capacity to payback. As you may think that you’re credit is outstanding, you might need to check once a year. This is to avoid being surprised by what the result would be and possibly find ways on how to fix it.
Your Credit Score
The fact is, you might be unaware that there are certain ways that can affect your credit which you might not be aware of. Moreover, you must understand the facts regarding your credit ratings and how significant is your credit score. Your credit score is a number that ranges from 300 to 900.
It is a way to distinguish how worthy you are or risky as a borrower. In general, if your credit score is over 700, it is termed to be good enough. If it reaches more than 750, it would mean that you’re far better than several of the majority of Canada’s residents.
Your Credit Report
Your credit report contains all the aspects of your financial history for the past seven years. This includes all the debts that you have in the past up to what you currently have. It will also show the frequency of your credit inquiries or how many times have you tried to qualify for a loan. If you wish to obtain a copy of your credit report or credit score, you can get it through Transunion or Equifax which are two of the known credit reporting agencies for Canadians.
Useful Way to Improve Your Credit Score
There are useful ways that help you assure in getting a good credit score. Knowing these will make more vigilant in complying to your obligations. Most importantly, it is a must to maintain a good credit score since this will be your passport for lenders to accept your loans. Besides, a good credit score can help you qualify for a loan at a much lower rate. In fact, according to Canada.ca, your payment history serves as the most significant component of your credit score. The following are some useful ways that can guide you in fixing or improving your credit:
Start Paying On Time
The first effective way to grow your credit score is to pay your entire bills on before its due or on its due date. This may include rent or utility bills, as well as debt payments
Don’t Delay Your Payments
If you can’t pay an extra or the full amount on your credit card, at least pay the minimum each month to maintain a good credit rating.
Never Apply for New Credit Cards or Loans
Never think of getting another credit if you’re still paying off your debts. Besides, if your income is sufficient for your monthly expenses and obligations, you will surely struggle if you obtain a new loan that you don’t necessarily need.
Avoid Several Credit Cards or Loans
Refrain from accumulating over 75% on your available amount limit on your credit card as this may imply that you are already incapable to afford for new credits.
Maintain Constant Communication with Your Lender
You always have to keep your creditors know with regards to your current financial status. So, if you think that you might have a hard time paying, make sure to let your creditor know. If it’s regarding your utility bills, reach out to them and extend a request to pay it next month with late fees may be to compensate.
Avoid Skipping a Payment
Regardless of your bills are escalated for a dispute, it is best to pay it if you can afford to do so.
Build A Good Credit
Don’t Take Several Hard Blows
If a hard hit is visible when checking on your credit report, this may count in your credit score. So, when anyone tries to do credit inquiries this will show on your report. This is the reason why you should refrain from applying to several lines of credit or credit card.
Soft hits are credit checks that may be visible in your credit report, but this will not be visible to the lender or creditors. Moreover, this won’t affect your credit score as well.
The Consequences of Having a Bad Credit Score:
- Your chances to get a mortgage
- The possibility to get a much lower interest rate
- The effect in your employment or job offer
- Denied in a rental application
- Might not be accepted to lease a car
Lastly, to know where you currently stand in your credit, you must check your credit score one in a year. It can help you evaluate the accuracy of your credit report and fix it when necessary. You might need for pieces of information that are obsolete, not relevant or any missing information that can help improve your credit. Besides, knowing where you currently stand in terms of finance, can help you prepare and anticipate circumstances and plans for the future.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.