11 Simple Ways to Boost Your Credit Score
by Kevin Silver
Is a bad credit score holding you back from qualifying for a loan? There are a lot of ways to start rebuilding your credit score that you may not be aware of. Below we've compiled a list of 11 things you should do if you're looking to improve your credit score.
1. Know Your Credit Score
Knowing your credit score is the first step in improving your credit score. You can't know whether or not you need to improve if you are not always aware of what your credit score is. You should check your credit score approximately once a year. When you know your credit score, you have a better understanding about what factors are affecting your credit score negatively. Once you know what is depreciating your credit score, you can work towards improving in these areas.
2. Pay Your Bills on Time
Another tip for improving your credit score is to pay your bills on time. When you pay your bills on time, you can improve the blemishes on your credit score almost immediately. This goes for small overdue payments. Bills that are 90 days or more overdue will take longer to recover.
3. Pay in Full
In addition to paying your bills on time, it is important to try and pay your bills in full by the due date. If you are unable to pay in full, pay as much as you can afford. Paying the minimum amount should only be a last resort on months when you don't have any other options.
4. Pay off Debt A$AP
Paying off your debt as soon as possible is another crucial step in improving your credit score. If you manage to pay your bills on time and pay them in full, you should have no problem paying off debt quickly. The longer you're in debt, the more negatively that will affect your credit score.
5. Don't Max Out Your Credit Card
Going over your credit limit negatively affects your credit score. In order to help improve your credit score, try to stay at no more than 35% of your total limit. Keeping your balance low will help increase your credit score.
6. Keep a Credit History
If you want your credit score to improve, you need to have a credit history. If you don't have a history of borrowing money and paying it back, you may have a low credit score. In order to have good credit, you need to build credit.
7. Keep Old Credit Accounts
Although you may not be using an old credit account because you've already paid it off, you should still keep it. Good credit, whether it is old or new, is still good credit. Likewise, having an old credit card, even if the balance is zero will improve your low credit score. These are two simple ways to improve your credit score.
8. Have a Low Credit Card Limit
In order to build credit, you should have a credit card, however, it does not mean that you have to have a large credit limit. If you have poor credit,try to limit your credit toless than $500 per month. This way, it is easy for you to pay off the credit and the monthly payments will be low.
9. Spread Your Credit Thin
If you require a higher budget than $500, spread your credit out on multiple cards. It is better to have two credit cards, with low limits, and not fully used than one credit card that is maxed out. Having unused credit is considered a positive on your credit history.
10. Payment Priority
When it comes to paying your debt off, think about which debt will be reported, such as a credit card, loan, or lease payment. Pay these types of bills first because they will be used towards your credit score. Mortgage payments are generally not reported on Canadian credit reports.
11. Communicate with Credit Companies
If you have a history of paying on time, usually if you call and ask the company if you can have an extension, they will give it to you. Maintain a good track record, and you will have some leeway with lenders. Be sure not to abuse their goodwill, however. Repeatedly asking for extensions may have the inverse effect, and harm your credit score.
If you are struggling to receive a loan because of a bad credit score, contact Magical Credit. We specialize in offering cash loans of $500 to $20,000 to clients with bad credit, particularly those on government income or subsidies such as EI, WSIB, pension, etc.
