Fifty-six per cent of Canadians don’t check their credit scores. Do you know the credit tips that can help repair your score? Don’t miss these five easy ways to fix bad credit and improve your credit score fast!
It’s never too late to fix bad credit and improve your credit score! Credit has the power to determine your quality of life by controlling things like being granted a residential lease, a mortgage, or purchasing a vehicle.
A study conducted by Tangerine surveying 1,005 Canadian respondents about New Year’s resolutions found that 32 percent of respondents said their 2018 New Year’s resolution was to improve their financial health.
Unfortunately, your credit won’t fix itself. There are steps you need to take if you want to fix bad credit, and educating yourself is the first step to success. These five tips will help you fix bad credit and improve your credit score fast.
The only way you can prove to lenders that you’re responsible and capable of paying back credit is to make sure you’re actively using a product of credit. If you can’t get approved for new credit because of your score, there are options available for Canadians who have no credit, or a low credit history. Credit repair companies are a great way to show credibility to lenders and dedication that you're willing to get your finances back on track. To learn more about the benefits of using a credit repair company, read our recent blog post: The Easy Way to Increase Your Chance of Loan Eligibility.
If you have multiple lines of credit that are all sitting at max capacity, we know how stressful it can be, especially after the holidays. However, if you don’t make payments on your credit, it won’t get better. Payments should be on-time and at least the minimum. If you’re struggling with making minimum payments, you might want to research your options – consumer proposals, debt management programs or a debt consolidation loan could be extremely helpful to you!
There are two kinds of credit that are accounted on your report – installment and revolving. Otherwise known as “mixed credit”, Canadians who have both installment and revolving credit on their file tend to have a higher credit score compared to those who only have one or the other. Installment credit is a type of credit that has a term and a fixed payment (i.e. auto financing and personal loans). Revolving credit is any credit that once you pay off becomes available to you again (i.e. credit cards or lines of credit).
Inquiries made on your credit file differ. Soft credit inquiries do not affect your credit score and are only used for informational purposes; if your work does a background check, if your financial institution pre-approves you for a loan, etc. Hard inquiries are made when a lender pulls your credit to see if you’re eligible for a loan. Any hard inquiry made on your file could have a small impact on your credit score, so it’s important to be mindful if you’re applying for multiple loans. Luckily, the credit bureau counts all inquiries made for an auto loan within a 45-day period as one inquiry, so customers can shop around without having their score heavily impacted.
Over 56 per cent of Canadians have never checked their credit report. Your Credit Report is a summary of your credit history, and every time you borrow money from a lender it is documented on your credit report. Personal financial history like missed payments, your SIN number and any opened accounts can be accessed by lenders and financial institutions through credit reporting agencies. The two agencies in Canada are TransUnion Canada and Equifax Canada. Your financial activity stays on your credit report for up to seven years, so it’s never a bad idea to request a free copy of your credit report to evaluate your history and ensure that everything is correct. Checking your credit report is also a great way to avoid any fraudulent activity on your file. Keeping a watchful eye on your report could be the difference between getting approved for a loan or not.
It’s not too late to fix your credit. In fact, any time of the year is a great time to start educating yourself about financial literacy. If you’re in need of help organizing your finances, check out our website to see how we can help you today!
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