As a mortgage broker, I see all shapes and sizes of credit reports. From the horrendously bad, to the best-of-the-best. There are no big secrets when it comes to maintaining a good credit score but there are a few tips I can share here that may help to improve your score. The last thing you want is to be declined in your time of need – mortgage, new car, line of credit for repairs.
1. Pay your bills on time – once a debt is 30 days late, it will reduce your credit score and stay in your history for three years. Make the minimum payment.
2. Don’t “max-out” your cards or exceed your limit – better to apply to the lender and ask them to increase your limit. Just be responsible with the new credit.
3. Avoid department store cards – at rates around 30 per cent, this type of credit will reduce your credit score.
4. Don’t close old credit cards – one-third of your score comes from your credit history so as soon as you close the old card, you cancel the history that has hopefully benefitted your score.
It’s very important for individuals who have claimed bankruptcy or gone through a consumer proposal to re-establish their credit as soon as they are discharged or have completed repaying their proposal.
These are just a few tips that can provide some help whether trying to maintain an already good score, or if you are trying to improve a bruised score. Unfortunately, there are no quick fixes and you should never pay for a service to improve your credit score. Only time can help, along with taking the right steps.
My last tip is that you should ideally review your own credit report annually to check it for signs of fraud and to make sure information is accurate and up-to-date.
For my complete tip sheet or questions regarding your own credit situation, please don’t hesitate to contact me at [email protected] or (416) 698-9990.
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