Good credit can make it easier to do things such as rent an apartment or negotiate a lower rate on a loan.  Bad credit on the other hand can hold you back from accomplishing your dreams.  If you have bad credit, you don’t have to pay someone to help you improve it.  Follow these 5 easy tips to have better credit and be closer to achieving your dreams.

1. Check Your Credit Report

You may access your free credit report and score from one of the top two credit reporting bureaus, TransUnion (https://www.transunion.ca/) and Equifax (https://www.equifax.ca/personal/).  According to Equifax, good credit is anything 660 or higher.  The higher the credit score the better your credit rating.

Review your credit report and make sure it is accurate.  Report any inaccuracies. The credit bureau will have a process to report disputes. See if you have unpaid balances or if anything has gone to collections.  Pay these as they could negatively impact your credit score.

2. Pay Your Bills On Time

Paying your bills on time, on or before the due date, is important to maintaining good credit. Ideally, you want to pay the full balance, however, if you cannot pay in full, the minimum balance should be paid. If you are paying online or through the mail, you should give enough time for the mail to reach the creditor or the online transaction to be processed.  Set up auto-pay with the lender or through your bank for at least the minimum amount to avoid late payment. 

3. Don’t Close Old Accounts

One thing that could impact your credit score is the length of time your account has been open.  The longer the average age of your credit accounts the better.  Keeping those old accounts open, even if they are paid off and not being used, could help build up your credit score and maintain a credit history.

4. Keep Your Credit Utilization Rate Low

Your credit utilization rate is the amount you owe compared to the limit. This is reported as best practice to help maintain or improve your credit. It is recommended that you keep this rate at 30%.  For example, if your credit card limit is $1,000 you should maintain a balance of at most $300 by the due date.  You may do this by spending less or paying more often to maintain the recommended 30% rate.

5. Don’t Open Too Many Credit Accounts At The Same Time

If your credit is low, applying for too many new credit accounts, that require the lender to request your credit report, could negatively impact your credit score. To help improve your credit score, minimize how often you apply for new credit.  New credit accounts could also affect the age of your credit history.

Conclusion

Having good credit can make things easier when renting or buying a home.  Make sure you know your credit information.  Follow these 5 tips to maintain or to help improve your credit score and report.  If your credit is not good right now, remember it may not improve overnight but with persistence and consistency, you will get there.  Be patient.  Don’t give up. 

 Start your journey with confidence. Contact me today.