Wondering how you can improve your credit score in Canada? We’ve put together a comprehensive guide to help you.
Your credit score is a three-digit that can go up or down depending on the details on your credit report. And if you have been working towards improving your credit score for a loan or a better interest rate, you would be eager to see results.
There is a sure way to guarantee how soon your credit score will increase or by how much. Some businesses send credit report updates daily, while others monthly.
It can take several weeks for a change to be obvious on your credit report. Once your credit report is updated with positive details, there are no certainties that your credit score will increase immediately or if the increase will make enough difference with an application.
Note that your credit score could stay the same, or it might even decline depending on the impact of the change and the other details on your credit report.
What is a Good Credit Score?
A good credit score opens doors to several credit card offers, qualify for loans with good interest rates and pay lesser insurance premiums. A good score is around 681-720, while an excellent score is around 720-850. With a 720-850 score, you get the best rates on credit cards, home mortgages, and car loans.
Any score beneath 640 is considered poor, as you’re likely to be termed a high-risk borrower, thus you’ll be allotted a higher interest rate and would not qualify for a typical loan.
How to Get a 720 Credit Score in 6 Months?
Attaining a 720 credit score in 6-month might seem a bit impossible; knowing where to start makes the whole process hassle-free. Below are ways to achieve a 720 credit score in 6-month.
Dispute Negative Debt
If there are any debts you feel you do not owe on your credit report, you can dispute them!
This can be done using either a credit repair service to help dispute a negative debt or send a certified letter requesting their removal to each of the credit bureaus.
Having done this, your creditor has 30 days to answer and if they don’t, the credit bureau will remove the negative item from your report. This will instantly influence your credit score positively.
Pay What You Can Afford
This is an aspect where most credit card users shoot themselves.
If you call the creditors listed on your report trying to establish payment, either in full or on a payment plan, it could affect your credit score because many will run a hard inquiry.
Some creditors will ask for full payment while others will not remove the dent of your report even after paying in full.
Get New Credit Cards
Getting a new credit card can easily help improve your credit card score, sadly not all credit cards are equal.
Ensure that you are eligible for a credit card that scores as unsecured debt and that the company will submit a report to each of the three credit bureaus.
Do not accept any card that reports annually, a monthly report is great. Ensure to get enough details on how much you can charge without having a negative impact on your score. And also, check how much you are expected to balance up monthly.
Monitor Your Credit Utilization
Your credit utilization plays a huge role in how great your credit score will turn out. Credit utilization simply means the amount of credit available to you that actually use.
For instance, if the amount of credit available to you monthly is $1500 and you spend $500 of that credit, you have a credit utilization rate of 33.33%.
A good credit utilization ratio is less than 30% of the total credit available to you. So if your monthly credit allowance is $1500 monthly, you should aim to spend not more than $450 monthly.
Become an Authorized User
Becoming an authorized user on someone’s credit card is a nice way to give your credit score a boost. This simply means being able to use someone else’s credit card in your name.
To become an authorized user, the primary account holder will need to add your name to their credit card account, and give you authorization to use it.
The downside of this is that if the primary card owner doesn’t stay on top of their payment, your credit will be affected.
However, if the primary account holder has very good credit habits, it will have positive impact on your credit. So it’s vital to only become an authorized user of someone who has great credit habits.
How to Improve Credit Score in 30 Days
Your credit score has several influences on your life. A good credit score determines your mortgage, car loan rates.
It also determines if your apartment or credit card application will be approved or not. It sometimes goes as far as determining if you’ll be hired or not for employment.
It is pertinent that you start improving your score now. Here are simple ways to improve your credit score in 30 days.
- Get additional cards
- Charge small amounts to dormant credit cards
- Remove recent late payments
- Increase your credit limits
- Remove a collection account
- Pay down revolving balances
How to Boost Credit Score Overnight
You can boost your credit score overnight with the following ways:
- Dispute all errors on your credit report
- Make timely payment
- Have a family add you on their cards as an authorized user
- Avoid excess hard inquiries on your credit report
- Pay down your revolving balances – up to 30%
How to Raise Credit Score by 100-200 Points
Your credit score is very important; it determines whether or not you get approved for loans and lines of credit. Below are ways to quickly raise your credit score by 100-200 points
- Increase your credit limit
- Become an authorized user
- Write a goodwill letter
- Open a new account
- Dispute negative entries