Your credit is not perfect? Here are 5 tips to restore your rating
If you’re among the 41% of Canadians surveyed who say money stresses them out, you’re far from alone.
This stress could also apply to your credit rating. Do you know yours? This three-digit number controls many more aspects of your life than you might imagine. Here’s how to find out your rating and how to improve it or keep it in good shape.
According to Laurie Campbell, CEO of Credit Canada Debt Solutions can not only help you get a line of credit, car loan, bank loan, or mortgage, but can also help you get better insurance rates, better rates for any loan you qualify for, a cell phone contract, a job offer or a home rental. Potential employers can review your credit report, as well as potential landlords. »
What is a “good” credit rating?
In Canada, credit scores range from 300 to 900. The higher the rating, the more likely a person is to pay their bills on time. Julie Kuzmic, Director, Consumer Advocacy, Equifax Canada says, “Usually a rating of around 760 or higher is considered excellent. Lenders would likely consider someone with an 830 rating to have the same risk profile as someone with a 790 score. worry about increasing his rating. »
How to check your rating?
Go to Equifax.ca or Transunion.ca. These are the two main credit bureaus in Canada. You can request in writing (or in-person in some cities) a free copy of your credit report. However, this will not tell you your credit rating. For this, you will have to go online and pay to get it. Check with your bank or credit card company some have limited-time promotions offering the chance to get your rating for free. Be sure to read their privacy statement in exchange for their services. Note: checking your rating will have no negative effect on it!
Do not panic establishing or improving your rating takes time
Your credit rating fluctuates. For better or worse, each month your late and on-time payments and other factors influence your score. But with a little effort and attention, you can increase your rating and keep it high.
Both Julie and Laurie emphasize that there is no quick fix.
If you’re just getting started, a good way to build a strong credit history is to get a credit card in your name and use it occasionally, making sure you make payments on time. “As little as six months of a good payment history can go a long way toward getting a good credit score,” says Julie.
Some tips to improve your score:
1. Pay all your bills on time.
This includes but is not limited to rent, mortgage payments, utilities, credit cards, and property taxes. A minimum payment made on time is better than paying off the full balance late.
2. Check your credit report at least once a year.
If it contains inaccurate information, contact Equifax or TransUnion directly and notify them immediately. Inaccurate information on your credit report could be an indication of identity theft or fraud.
3. If you’ve missed payments
Do what it takes to update your accounts and stay there. Better to make payments even the minimum than not to make any at all.
4. Don’t make too many new credit applications in a short period.
Open new accounts only as needed. And avoid department store cards they usually harm your score. In addition, they are often accompanied by an exorbitant interest rate.
5. Sometimes things end up in the collection
Like a cable bill or an old phone plan that you thought you had shut down that has a balance owing. No matter the amount, having anything in the collection will hurt your rating. Your record can show if this happened. Remedy the situation by paying off the existing amount so that it can be removed from the collections department.
Need additional help? You can get a free session with a non-profit credit counselor who can get your credit report and score out at no cost to you.
Ultimately, what lenders are looking for is timely payments, which will have a positive effect on credit scores over time.
