Five Tips to Improve Your Credit Score
If you find that you aren’t getting approved for credit cards or mortgages, or aren’t getting favorable rates for financing, then you might need to make some improvements to your credit score. Even if your credit history isn’t great now, it’s never too late to learn how to improve it.
Unfortunately, building credit isn’t a particularly quick or simple process, but neither is it a complicated process. With some time, your credit rating can become excellent and to help you reach that stage, mortgage specialist Dwight Trafford has put together five tips to help you improve your credit score.
Tip #1: Pay down credit cards.
The number one way to increase your credit score is to pay down your credit cards, so they’re below 70% of your limits. Revolving credit like credit cards seems to have a more significant impact on credit scores than car loans, lines of credit, and so on.
Tip #2: Limit the use of credit cards.
Racking up a large amount and then paying it off in monthly installments can hurt your credit score. If there is a balance at the end of the month, this affects your score – credit formulas don’t take into account the fact that you may have paid the balance off the next month.
Tip #3: Check credit limits.
If your lender is slower at reporting monthly transactions, this can have a significant impact on how other lenders view your file. Ensure everything’s up to date as old bills that have been paid can come back to haunt you. Some financial institutions don’t even report your maximum limits. As such, the credit bureau is left only to use the balance that’s on hand. The problem is if you consistently charge the same amount each month – say $1,000 to $1,500 – it may appear to the credit-scoring agencies that you’re regularly maxing out your cards. The best bet is to pay your balances down or off before your statement periods close.
Tip #4: Keep old cards.
Older credit is better credit. If you stop using older credit cards, the issuers may stop updating your accounts. As such, the cards can lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the cards for a long time. Use these cards periodically and then pay them off.
Tip #5: Don’t let mistakes build up.
Always dispute any mistakes or situations that may harm your score. If, for instance, a cell phone bill is incorrect and the company will not amend it, you can dispute this by making the credit bureau aware of the situation.
As a mortgage specialist in Orangeville, Dwight Trafford is dedicated to helping you improve your credit scores. Once that is done, I will help you with all the mortgage-related information you need to make a well-informed mortgage decision on your mortgage financing needs. With over twenty-five years of experience, I understand how credit and mortgages work, and want to share my knowledge with you.