Your credit score determines your ability to make major purchases on credit like houses, cars, and even furniture. If your score is low, you might have to pay a higher interest rate or you could be turned down for a loan entirely. These days, even utility companies and cell phone providers are using credit scores to set prices and payment terms. So, if you have damaged credit and you want to repair it, follow these tips from York Credit Services.
Check Your Credit Report
You can’t do anything about your credit score until you know what it is and acknowledge that you need to improve it. Many people go through life never knowing what their score is and as a result, they never get it to the point where they can make major purchases. You can get a free copy of your credit report, which will include your credit score by requesting it from the major credit reporting agencies.
In Canada, the two major credit reporting agencies are Equifax and TransUnion. You are entitled to a free credit report once a year from both agencies and you can request your report online at each agency’s website. While most creditors report to both agencies, some don’t, so it’s worthwhile to request your report from both agencies to make sure you have a complete picture of your score.
Identify Errors and Correct Them
Another advantage to getting your credit report is that you can identify errors and correct them as quickly as possible. Credit agencies make mistakes and if you let them linger, they can become more difficult to fix. Additionally, if anyone else has accessed your credit, you can dispute those negative entries and you’ll see your credit score increase from getting those overturned.
Always Pay Your Bills On Time
No matter the type of bill you have, whether it’s a car loan, mortgage, cell phone, credit card, or power bill, pay it on time, every time. There is nothing you can do to increase your credit score more quickly than by simply taking care of your responsibilities. The minute you’re late paying a bill or you don’t pay one altogether, your credit score tanks.
Reduce Your Credit Utilization Percentage
Most credit experts recommend keeping your credit utilization percentage to no more than 30%. This means that of all the credit you have available, you are using no more than 30% of it. You do want to have some debt, believe it or not, but it should not be higher than 30% of the amount of credit lenders have extended to you. When lenders see you start using more than 30% of your credit, they get nervous because they worry you aren’t going to be able to pay your bills. As a result, they lower your credit score so you can’t get any additional credit.
You aren’t stuck with a low credit rating for the rest of your life, no matter how low it is right now. It can be fixed starting with these tips. Credit counselors can also give you additional information on how to increase it even further.