A good credit score is important as it can affect you both financially as well as personally. In Canada, credit scores are three-digit numbers that go from 300 and 900. This number represents the risk of how likely it is that you will repay credit. Each person will have a different score based on their credit report. A low credit score is below 660 and having a low score means you might have more trouble getting loans, renting a house or a vehicle or even applying for certain jobs. So, without further ado, let’s look at how you can improve your credit score.
Always pay on time
Always paying bills and not missing payment deadlines is a good way to avoid paying the unnecessary interest. It can also improve your credit score as it shows that you are a reliable borrower. With a credit history of bills always paid on time, lenders will be more likely to offer you credit in the future. Even a delay of one day could affect your credit score.
Mix the types of credit you have
The types of credit you have also determines your credit score. If, for example, all of your debts are credit cards, this can affect your credit score. If you want a credit card, apply for one at a time. If you apply for lots of different ones (because you fear being declined, for example), this will negatively affect your credit score.
Have a low utilization rate
Your credit score will be higher if you use less of the credit that is available to you. For example, if you have $20,000 of available credit but only use $5000, you will be seen as less of a risk and will have a higher credit rating. It’s always better to pay back unsecured credit as soon as you can.
Separate business credit and personal credit
Personal credit is different to business credit so make sure you don’t overlap the two. Make sure business purchases are always made on business credit cards.
Keep track of your credit score
Ensure that you look at your credit score and read your credit report often. This will help you to make sure that the information about you is correct and up to date. If there is a mistake in your credit report, you can get it corrected and you can see if you have been a victim of fraud too.
Protect yourself from bankruptcy
If you fail to pay bills continuously, the debt is referred to a collection agency. If you still don’t rectify this debt, the collection agency could seize assets and you might have to file for bankruptcy.
You can’t predict how quickly you can significantly improve your credit score and it will take time or patience. If you use these tips consistently, you will be able to improve your credit score. Understanding your credit score and how to improve it can be confusing. Seeking professional advice National Credit Help is a great way to get back on track.