A good credit score can open many doors. If you’re struggling with a low credit score, there are ways to improve it. There is hope! Below, you will find the top 10 ways to do just that, according to Crediteck.
Why Is a Good Credit Score Important?
Before we get to the top 10 ways to improve your credit score, we need to understand why a good credit score is important. When you need a loan, you’re more likely to get favourable interest rates – or even get approved for a loan in the first place – if your credit score is good. A low score can lead to higher interest rates or getting rejected for a loan. Another example is a rental application. A good credit score can make the difference between getting the apartment you applied for – and getting denied.
Like it or not, credit is a huge part of economic life. From buying a house to getting a car to renting your first apartment, your credit score can be the gateway to accessing these major items, which will determine your future quality of life to some extent.
For all the reasons listed above, it’s highly beneficial to have as good a credit score as possible for you. Without further ado, here are the top 10 ways to improve your credit score!
1: Understand How Your Credit Score Is Determined
In Canada, two major credit bureaus calculate credit scores: Equifax and TransUnion. Lenders may wish to access your credit score before giving you a loan. Credit bureaus take multiple factors into consideration when evaluating your credit score. Understanding how these scores are calculated is the first step to ensuring that your score doesn’t slip. These factors include your credit card balances, making payments on time, not taking out too many loans, and many more. Make sure to study all the different factors in order to navigate your financial life in the most pragmatic and effective way possible.
Here are some of the factors:
- How long you’ve had credit for
- Credit card balance
- Missed or late payments
- The amount of debt you owe
- Being under or over your credit limit
- Any record of insolvency or bankruptcy
By evaluating all of the above factors, a credit bureau will be able to make a determination as to your overall credit score. The exact formulae used to calculate these scores are not widely known, so it is impossible to know 100% how the score will be calculated by the credit bureau. However, by being aware of these factors, you will put yourself in the best position to do the right thing financially.
2: Pay Your Bills on Time
Paying your bills on time is one of the surest ways to improve your standing with credit bureaus and other financial institutions. The more reliably you pay your bills, the less risky you will appear to potential lenders, and they will judge you as more likely to repay your loans without significant issues, making them more likely to give you the much-needed funds.
If you have trouble paying your bills or are caught without cash in between paydays, Crediteck can connect you with a lender via our quick online application. Fill it out – it only takes a few minutes – and be linked with a lender in a flash. You could receive money as soon as the next day!
In addition to keeping your credit score healthy, paying your bills on time will allow you to preserve your peace of mind and move forward with confidence. Increasing your income, whether by pursuing a side hustle or learning new skills, is an excellent way to level up your financial game.
3: Keep Your Credit Card Balances Low
Having a consistently high credit card balance or only paying the minimum payment each month is less than ideal for maintaining a good credit score – or raising it! Make sure to pay off the credit card balances each month and maintain a low debt load if at all possible.
Reevaluate your discretionary spending. Perhaps cutting back on that Starbucks coffee will help put you back on track! Eating out less often may be another helpful tactic to curb your expenses. Cooking from home is a good way to save money and eat more healthily as well. Whenever you make a big purchase, evaluate whether you can afford it or whether a cheaper alternative may be best. Live below your means, and you’ll set yourself up for a richer and more relaxed future.
4: Pay Down Your Debt
Paying down any outstanding debt will improve your financial standing as well. It can be helpful to consolidate your debt as you may pay a lower overall interest rate and have smaller monthly payments, depending on the lender.
If you need to take out a loan, it’s important to consider your ability to repay it. Paying back your loans responsibly is a great way to build your credit. Crediteck can connect you with a lender in Canada, even if your credit score is low. We do not do credit checks as part of our application process, so in many cases, you could receive money in your bank account the very next day. By making your payments on time, you will show that you are financially responsible and improve your financial standing.
5: Keep an Older Account Open
The longer your credit history, the more reliable it is. Consider keeping your older accounts open and active to build a more solid credit history. By carrying out transactions in the same account or accounts over a long period of time, you will be able to show your financial stability and credibility to lenders.
This is one of the biggest factors in improving your credit score. Crediteck is here to connect you with lenders across Canada and take care of your urgent financial needs with quick cash via a lender in our network. Use our quick and easy application form online. Taking care of your financial needs now could be the way to a brighter future.
6: Don’t Go Over Your Credit Limit
Going over your credit limit can be highly detrimental to your credit score. It is best to have a low credit utilization ratio. Aim to stay within 30% of your credit limit at any given time. This will ensure that you keep your spending in check. This, in turn, will help you build a better credit history.
Creating a budget is a great way to stay well within your credit limit. Rein in your spending if necessary. It will be easier to know where you’re going overboard by tracking all your expenses in an organized and systematic way. Your credit limit may increase over time as you build your credibility, allowing you to cover larger expenses when more important, big-ticket purchases are needed. Keep this in mind during your financial journey.
7: Monitor Your Payment History
It’s useful to monitor your payment history, establish your cashflow dynamic, and create a budget. Once you have a good idea how much you have coming in and going out each month, you’ll be in a much better position to build good credit. Monitor your payments with dedication, and you will not go far astray.
Crediteck has access to a network of Canadian lenders who will keep you informed and work with you to ensure that you make your payments in a timely manner. Appropriate budgeting and judicious spending will ensure that you stay on top of your payments and get back on your financial feet. Any lender who will not be transparent and clear about your rights and the details of your loans should be avoided, so make sure you use Crediteck to connect with responsible lenders! If you don’t get connected with any offers, check out Crediteck Top 10 Quotes for additional opportunities.
8: Diversify Your Credit
Another good way to build a good credit history is to diversify your credit. Make sure not to take out too many loans at any one time. Taking out more loans than you can afford will likely compromise your financial situation. However, having different types of credit, from a car loan to a line of credit, may help improve your score.
If you need a quick loan, Crediteck offers a fast and easy online application process. You may be instantly connected with a lender – and cash may be deposited in your bank account as soon as the next day! Even a bad credit score is not necessarily an obstacle, as Crediteck does not check your credit score as part of our application procedure.
If you need a larger loan, consider a home equity line of credit – HELOC for short – with Equity Recharge. They will connect you with a network of private lenders across Canada who provide a secure HELOC. You could get between $10,000-$50,000 to cover a bigger expense such as a renovation or a wedding. Read more about home equity loans and HELOCs here.
9: Review Your Credit Reports
It helps to know your credit score in the first place. You may order a credit report online for free from Equifax, one of the two major credit bureaus in Canada. A good credit score will generally be above 660. Statistics show that the average Canadian’s score is 650. A score above 650 makes a greater range of financial products accessible to you.
By reviewing your credit reports every so often, you will ensure that you’re staying on track to a better financial future. Stay on track with your financial obligations with a little help from Crediteck! When in need of quick cash, submitting a quick online application with us can lead to a fast approval with a lender in Canada and getting the funds you need in a rapid timeframe.
10: Beware of Credit-Repair Scams
While some online offers to repair your credit may seem appealing, they are sometimes too good to be true. Building good credit and repairing bad credit is a process that is likely to take some time. Be wary of any overinflated promises. Here are some of the telltale signs of a credit-repair scam:
- Upfront fees. If the company wants you to pay before they provide any services, that’s an egregious red flag.
- Promise to remove negative information from your credit report. No one is authorized to remove accurate and up-to-date information from your credit report.
- Refuse or avoid explaining your rights to you. Disputing errors in your credit reports is a free legal right available to you under the Fair Credit Reporting Act. Your rights include cancelling your contract with the company for any reason within three business days.
- Tell you not to contact credit reporting companies. You have every right to do so.
Crediteck will only connect you with responsible and reputable lenders who follow all the rules and regulations that are applicable to loans and lenders in the region in which they operate. We are a trusted source for people seeking to connect with lenders across Canada. If you’re seeking a loan in Canada, our network of lenders could be a great option for you. Apply online today with our quick and easy process. Avoid scammers and opt for a safe and secure online experience with Crediteck.
In Summary
The above 10 ways are great ways to improve your credit score and potentially make a variety of loans more accessible and less expensive for you. It’s important to remember that improving your credit score takes time and is not an overnight occurrence. Keep applying the above tips, and you will get the results you seek.
Crediteck is here for you. If you have bad credit, you may still get a loan with one of the lenders in our network. Just fill out a quick application online, and we will instantly connect you with a lender. For those lenders out there who do report your payments to a credit bureau, repaying your loans responsibly can help you build a better credit score.
We hope that you’ve found the top 10 ways to improve your credit score helpful. If you have any further questions or concerns, come back to our blog page regularly. We’re always working on new content to keep you informed and up to date. Staying caught up is easier than catching up. Few things are as critical as reaching financial freedom – no matter what that means to you.
