If you have a low credit score and are aware you have to boost it, you’re not alone. According to TransUnion, 20% of Canadians have a score below 600. A good credit score isn’t just something to be proud of – it can help you score favourable interest rests when applying for a new credit card, mortgage or auto loan.
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If you think boosting your credit score is overwhelming, start with baby steps and follow our guide for building your credit. You will get there, slow but sure.
What is a Credit Score?
Your credit score is a three-digit number meant to determine how likely you will repay a loan or credit on time. This score will fall into one of these categories.
- 300 – 559 Very Poor
- 560 – 659 Poor
- 660 – 724 Fair
- 725 – 759 Good
- 760 – 900 Excellent
Elements that impact your credit score include, amounts owed, payment history, length of credit history, new credit, and the types of credit used.
As mentioned earlier, boosting your credit score won’t happen overnight, and there’s no one-size-fits-all solution. But you can get a bigger picture of your credit health with a personalized credit analysis, credit monitoring & more from companies like Borrowell. Knowing where you stand, as we; as a slow, disciplined strategy towards maintaining a solid score will pay off down the road when you want to qualify for a mortgage or auto loan. Remember, the goal is to ultimately fix all errors in your credit history.
Your credit score can have a big impact on your financial future. Sign up for Borrowell to get your credit score and credit report for free! Join over a million Canadians and get the tools you need to help understand, manage, and master your credit—in under 3 minutes. Checking your credit score with Borrowell won’t hurt your score.
The easiest way to know about your credit score is by checking it out. This relatively painless process will save you from the agony of a nasty surprise when you want to make a large purchase and discover you can borrow because of bad credit. And don’t worry—checking your credit score won’t lower it. You can even enjoy unlimited access to your score with Borrowell credit monitoring. Sign-up today!
How to Boost Your Credit Score
Although bumping up your credit score won’t happen overnight, here are some actions that will help your scores improve over time.
1. Pay All Bills on Time
Your previous payment history has a significant impact on your credit score mainly because past payment performance is considered a good indicator of future performance. You need to start clearing your bills on time if you have a history of paying them late.
Sign up for Borrowell to get your credit score and credit report for free!
Paying late or settling your account for less than what you promised to pay will negatively impact your credit scores. You will want to pay all your bills on time, not just loans and credit card bills but also utilities, rent, phone bills and more. If you have any missed payments, bring them current and stay current.
2. Keep Your Balances Low
Maxing out your credit cards can negatively impact your credit score. Using your card lightly is the best, and the less you charge, the better. Your credit report’s balance – typically the balance on your most recent statement – impacts your overall score, so a lower balance will help you bump up your credit.
3. Get a Secured Credit Card
A secured credit card may provide an excellent way to build your credit if you can’t qualify for a student card or a regular credit card. A secured credit card requires a deposit with your lender, and the deposit becomes the credit limit for your account. If you deposit $1,000, your card’s credit limit will be $1,000.
Should you default on any payment, your lender will use the security deposit to clear the balance. After some time, the bank usually releases the security deposit if you have cleared your bill on time and has portrayed financial responsibility.
4. Retain Your Unused Credit Cards
Keep your unused credit cards open if they are not accruing any annual fees. Your credit history’s length impacts your score, so maintaining the old cards with good standing is an excellent strategy to boost your credit score. You can use them once in a while to show activity on your profile.
5. Keep an Eye on Your Credit Report
A relatively straightforward way to boost your credit score is regularly review your credit report for any errors that might be negatively affecting you. Inaccuracies on your credit report may pull your scores down. Monitoring your credit report will help you identify these errors, dispute them and have them removed.
Other errors you’ll want to look out for include duplicated or fraudulent accounts and misreported payments.
Final Thoughts
As mentioned earlier, boosting your credit score won’t happen overnight, and there’s no one-size-fits-all solution. But you can get a bigger picture of your credit health with a personalized credit analysis, credit monitoring & more from companies like Borrowell. Knowing where you stand, as we; as a slow, disciplined strategy towards maintaining a solid score will pay off down the road when you want to qualify for a mortgage or auto loan. Remember, the goal is to ultimately fix all errors in your credit history.
Your credit score can have a big impact on your financial future. Sign up for Borrowell to get your credit score and credit report for free! Join over a million Canadians and get the tools you need to help understand, manage, and master your credit—in under 3 minutes. Checking your credit score with Borrowell won’t hurt your score.
