How to Improve Your Credit Score
December 7, 2015
Does your credit score need improvement? Here are 8 ways that you can improve it.
8. Pay Household Bills On Time
Paying your bills on time every time is one of the best things you can do to improve your credit score. This shows any potential creditors that you are financially responsible. Creditors have different grace periods, so it is important to make sure you pay all bills by their due date.
Delinquent accounts can have a negative impact on your credit score. If you have any past due accounts, then you should pay off the oldest ones first.
7. Pay Off Your Credit Cards
BMO recently revealed that 46% of Canadians carry a balance on their credit card each month. You can prevent your account from being charged interest if you pay it off each month. This means you will save money.
Unexpected events can happen, and you may not be able to pay your credit card bill in full each month. However, whenever possible you should try to pay it off as quickly as you can.
6. Make More Than The Minimum Payment
If you do carry a balance on your credit card, then you should try to pay more than the minimum payment. This will help you pay your credit card off much quicker. Credit card companies include an estimate of the amount of time that it will take to pay off your card along with your monthly statements.
Furthermore, paying more than the minimum will decrease your credit utilization rate, or the percentage of a consumer’s available credit that he or she has used. A low credit utilization rate can help improve your score.
5. Under-Use Your Credit Card
Creditors look at the amount of credit you have available and the amount you have used. Keeping the balance on your card low will look good on your credit report. Try to keep the credit utilization below 30 percent. This means that if you have a credit card with a limit of $3,000, then you should keep the balance below $1,000.
4. Raise Your Credit Limit
Although it may seem counterintuitive, you should consider asking for a raise on your credit limit. If you keep your spending the same but increase your credit limit, then you will be decreasing your credit utilization. For example, if you increase your credit limit from $3,000 to $4,000 and keep your balance at $1,000, then your credit utilization will decrease to 25 percent.
3. Be Cautious When Seeking Additional Credit
Applying for new credit can be a hard hit to your credit report. It will decrease your credit score. Additionally, if you apply for a lot of credit in a short amount of time, then this may raise a red flag with your financial institutions and credit bureaus.
However, new innovative options like Borrowell do not affect your credit score. we’re all about getting the best deal possible. That’s why we encourage our customers to shop around and get the lowest rate – it’s the reason we have worked to make sure our customers credit score is not affected when they check their rate with us.
2. A Long History Of Accounts
If you have had a credit card account that you have not used for years, then you may be thinking about closing it. However, you should occasionally use your credit card and pay it off. A long credit history can improve your credit score.
1. Mix It Up
The type of credit you are using can help improve your credit score. There are two types of credit, instalment and revolving. Credit cards are an example of revolving credit. A personal loan from Borrowell is an example of an instalment loan. You can improve your credit by showing your ability to manage both types of credit.
Smile. You have what it takes to improve your credit score.
Borrowell offers a personal loan to help you pay off your credit card balance. Check your rate online for free – it only takes one minute and it won’t affect your credit score.