Having a good credit score is very important and a bad one can definitely affect your life both personally and financially. The three digit number is said to be as the credit score that is between 300 and 900 and is designed to represent your credit risk or to see that you will pay the bills on time. A credit score is calculated with the help of the information of your credit report. The file of the consumer and the credit score that is calculated for a consumer vary between the two nationwide credit reporting agencies. This happens because all the consumers cannot report to both the agencies and there are different credit scoring models.

Most creditors can report to both but for that you have to have an account with a creditor that only reports one and with the creditor that doesn’t report to any. The lenders and the credit scores use many different credit score provided by the two credit reporting agencies, and credit scores that are custom built and used by a particular lender.

A low credit score under 650 can definitely affect your job application process, loan application approval, renting a house or vehicle in a negative way. People are not very clear about what a credit score means and how important it is to maintain a good credit score. You are not alone if you don’t understand the credit score and its importance. Here we will talk about the 7 simple but effective ways to maintain a good credit score

Paying bills on time

Paying you bills on time consistently is the best way to avoid you penalties and interest. It the best way to improve your credit score and your credit history which helps you to show your banker that you are a reliable business partner. A slight delay on the payment of your bill will have an aspect on your credit score. The most important aspect of your credit score is the history of your payment.

Go for a Credit Mix

The types of debt you have that determines your credit score is looked after by the credit rating bureaus. If you have too many cards it may affect your credit score especially when you have borrowed money from someone else. If you are opening too many credit accounts it may have an adverse affect on your credit score and the same goes if you are having too much credit inquiry with the credit bureaus. If you want that there should be no affect in your credit score than apply for the credit you need and you can be approved for and don’t apply for multiple credit products at the same time.

Maintaining a low credit utilization rate

A predictor of default risk is considered by the amount of credit you use and this will have a direct impact on your credit score. There is a rule in general that low rate utilization of credit is better. You should always pay back your credit cards and unsecured lines of credit as soon as possible.

Segregation of personal credit & business credit

Your business credit is different from your personal credit because it has reports from the firms and industry that works with your company such as suppliers and financial institutions. You should always separate your business credit with your personal credit as soon as possible. To top up your working, purchase supplies, and finance investments use your business loans, business line of credit and your business credit card. It is safe to keep away your business credit with your personal credit.

Get updated on your credit score on a regular basis

It is a good practice to have a look on your credit report regularly. This ensures you that the information is fully correct and the report is up to date and you are not a victim of fraud. Credit reports are also not perfect. Names of the person may be mistaken, the information of any other person might have been ended on your file and the debt which you have paid has been still now listed. You can easily have the details of your personal credit by the two sources of service providers in Canada; those are Equifax Canada and TransUnion. It is better to have a review of your credit history from all the credit agencies because agencies don’t share information. There are three options for you business credit bureau report that is Equifax Canada, TransUnion and Dun $ Bradstreet.

Avoid bankruptcy

The bills that you have left unpaid to a certain point here the debt is referred to the collection agencies, the assets that you have and the file are seized for bankruptcy will surely hurt your credit score. Avoid the conditions where the creditors will go after your assets publically. These collection and bankruptcy are likely to be negative for your credit score. To have a good credit score avoid this collection and bankruptcy.

Keep calm

It is very difficult to estimate that how long it takes for someone to improve its credit significantly. So you should have patience to see that your credit score increases or improves easily. To improve credit score you should start your credit history early on. You should start with personal and business credit card and always keep your utilization low. It helps to create a type of credit history which helps for the good business and personal credit scores. A credit score represents the credit of a person and is also the numerically based on a level analysis of a person’s credit files. There is a higher probability of repayment if the credit score is higher. The qualification for the sanction of loan is determined by the lenders who use credit score at what rate of interest and what credit limits Credit score is likely the way to predict the borrower’s ability to repay. It is quite easy to pass the plastic card but beware those might hurt your credit rankings.