Improving Your Credit Score

Review Your Credit Report

The first step for improving your credit score is reviewing your credit report.  Credit reports often contain errors.  If your report has mistakes, contact the credit reporting agency.  Each agency has a process for reporting and correcting errors.  Fixing mistakes on your credit report is a quick, simple way to improve your credit.

The Financial Consumer Agency of Canada (FACA) has a number of other active steps you can take to improve your credit score.

Establish a Credit History

You may have a low credit score if you have not used credit in the past.  You must show that you can borrow money and repay it.  Consider obtaining a credit card and using it responsibly.

Beware of Excessive Credit Applications

Excessive credit applications negatively impact your credit score.  Note: making inquiries about your own credit report does not impact your credit score.

Pay Bills on Time

Late payments have a significant negative impact on your credit score.  Multiple or ongoing late payments show creditors you are a bad risk.

Pay Bills in Full

When possible, pay bills in full by the due date.  At the very least, pay the minimum amount due each month.

Pay Debts as Quickly as Possible

If you are unable to pay bills in full, pay accounts off as quickly as possible.  Credit used versus credit available is a significant factor in your credit score.  Make a plan to be debt free as soon as you can.

Do Not Exceed Credit Limits

Every credit card has a credit limit.  Do not exceed this limit.  Again, higher balances have a greater negative impact on your credit score.

Beware Credit Repair Companies

Before hiring a credit repair company, consider the following:

Credit repair companies cannot do anything you cannot do yourself.  Repair companies have no special power for removing negative comments on your report.  If a negative comment on your credit report is in error, you can have it removed, as discussed above.  If negative information is accurate, a credit bureau will not remove it until the mandatory time period has passed.  

Do not believe exaggerated claims by a credit repair company.  If it sounds too good to be true, it is.  Following the steps above, and time repairs a poor credit rating.  

If You are Considering Buying a Home

If you are in the market for a home, or are working to improve your credit so you can buy a home, contact us.  Our realtors work closely with clients to help them position themselves so they can buy the home of their dreams.  At RE / MAX Hallmark, we look forward to working with clients where they are.  Contact us today.   

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