1. Leave old debts on your credit report
You can’t rebuild credit if you don’t have any credit to begin with! Often new and younger Canadians run into this problem because they are starting to just build their credit.
Old credit accounts are best to be left open because the longer the history of using credit responsibly, the better. Keep those credit cards around but you don’t have to use them!
2. Correct Errors In Your Credit Report
It’s a good idea to check your reports at least once a year to make sure all of your information is right.
Errors in your credit can be due to fraud or a mistake on the credit companies end. If you do find an error, contact the credit company to have the mistake removed. This is a great way to do a quick fix on credit and will boost your score!
3. Increase your credit limit
A lot of people think that having a larger credit limit is a bad thing, but the larger your limit is the better your credit is! This shows the lenders that you are responsible with credit and can live beneath your means. One of the best ways to increase credit limit is through installment loans such as auto loans or personal loans. Need auto financing? Here’s everything you need to know about getting an auto loan.
4. Pay your bills on time
This might sound like obvious but you would be surprised. Being on time is key in daily life and to rebuild credit. Your on time payments accounts for roughly 35% of your credit score. If you’re late making payments on your debt on your score is going to drop fast.
If you do know you wont make a payment on time. Call your creditor company and negotiate with them to extend your payment. This could potentially save your credit!
5. Use your credit more to rebuild credit
This tip may seem counter intuitive but one of the best ways to repair your credit score is to use your credit more. Credit is built on your ability to use credit and pay it back responsibly. This shows you are able to manage your credit. Use your credit responsibly and just make sure you pay it back on time!
6. Open a secured credit card account
Have you heard of a secured credit card? this is a great way to start your credit journey or to rebuild credit by giving a creditor company a deposit that is usually $300 to $500 on a secured credit card that is a great way to rebuild credit fast.
This is a great option to start building credit if you haven’t been able to get approved for a non secured credit card. They are generally guaranteed to be approved for.
7. Keep a low credit card balance
As a rule of thumb, it’s a good idea to keep your credit to less than 40% of your available credit. Do not MAX OUT your credit cards. For example, if your card has a credit limit of $2,500 you should only be using $750 of that each month and paying it off right away.
The bottom line
Having a good understanding of your credit situation will give you a leg up when it comes to improving your credit score. It can also help ease the stress of applying for auto financing. If you have a low credit score and need help applying for auto financing, try our free service today by clicking here.
Vehicle Auto Finance believes that all Canadians should be able to have fair interest rates and low monthly payments on auto financing regardless of credit history. For more information on auto financing visit our blog or click here for everything you need to know about auto financing.