The credit score is one of the great financial tools of the modern age. It helps us purchase beyond our immediate financial reach. The lenders agree to the delayed payment armed with the knowledge of our credit risk profile. That said, the credit score is an imperfect metric. Students, newcomers to Canada, individuals going through bankruptcy may get unfairly penalized. But there are ways to build up the credit score. See the six tactics below [plus a bonus number 7].
It is one of easiest ways to boost your credit score. Some of the bills you pay are reported to credit bureaus like credit card payment, loans, rentals and other.
Keeping track of due dates will indicate your commitment to managing your finances and show that you’re a reliable borrower.
Automatic payment in association with a personal financial software could be a great way to remind yourself of unpaid bills and payments.
A credit report is a record of your payment history, debt and credit management.
Errors on your credit report are dispiritingly common. And these errors are most often debts incorrectly attributed to you, payments misreported as late or missed or incorrect personal information. These types of errors can harm your credit score.
The sooner you dispute and get errors resolved, the sooner you can start to increase your credit score.
Credit utilization is simply how much credit you are using divided by the total amount of credit you have access to.
Credit utilization ratio is an influential metric for your credit score.
Experts suggest keeping the credit utilization of a maximum of 30% of your credit card limit and at the best keeping it below 10%, if possible. Most credit cards report your credit utilization once a month to the credit bureaus.
Being an authorized user means you can use someone else’s credit card in your name.
This can positively affect your credit score if the initial card holder has a long account history, on-time payments and a low credit utilization.
Credit builder loans are loans with an easy approval process that are designed specifically for people who need to build credit.
The lender set up a saving account of 300-1000$ and you make monthly payments toward the loan over six to 24 months and the lender reports the payment to credit bureaus. And once you make the full payment you get access to the saved money.
Sticking up to the credit builder loan offers you an opportunity to show that you can handle consistently making on-time payments.
The age of your credit history matters, and a longer history is better. If it is needed, you should look for closing newer ones.
Dwello is the cheapest (Free) option for renters to build their credit score. Whether you need credit repair or are new to the country or are starting out professionally, Dwello is the best option for you to build a credit score. Sign up for Dwello today and check it out. Or better still, ask your landlord to check us out.
Did we miss anything? Do you have any suggestions? Drop us a note through the form below.