9½ Steps to Repair and Improve Your Credit

Kelly Hudson • February 4, 2019

Your credit score says a lot of things about you and can affect many aspects of your life.


Though credit scores aren’t always an indicator of financial health, they are used in a variety of ways that could have a major impact on your life. Interest rates (including mortgage rates) are almost always determined by your credit score. Some employers & landlords may require a credit check to see if you have past credit issues.

Remember this is your credit report, not your “I’m Fiscally Responsible” report. Lenders want to know how you have historically handled credit in order to determine if you are a good credit risk.  Higher risk = higher rates!

The Rule of Two:

  • You should always have 2 “trade lines” going. This can be a combination of 2 credit cards OR a credit card and a line of credit/ loan etc.
  • Credit lines should have a minimum $2,000 limit
  • Minimum of 2 years old

So, if your credit score sucks, it could be costing you.

The good news is, you don’t have to live with bad credit forever. There are plenty of things you can do to improve your credit score. Use the 9½ tips below, to improve your credit score

#1 Know Your Credit Score and Credit History

Request a free copy of your credit report from both of Canada’s credit agencies (TransUnion and Equifax). You are legally entitled to one free credit report yearly from each credit agency. Check out my BLOG How to Get a FREE Copy of Your Credit Bureau

#2 Review both TransUnion & Equifax Reports for Any Errors or Discrepancies.

If you find any errors in your credit report, you should dispute them with Equifax or TransUnion and request to have them correct any errors.  For contact information: How to Get a FREE Copy of Your Credit Bureau

#3 Pay On Time, EVERY time!

This might seem obvious, but you need to make your payments on time, every time!  This is crucial to repairing and maintaining your credit rating. The largest percentage of your credit score is based on your payment history!! Even being a couple of days late will have a negative impact on your score. Staying current with your payments has a huge positive impact.  If you can’t pay the balance off in full, pay the minimum amount on time!

#4 Don’t Go Over Your Card’s Credit Limit

Going over your credit limit, even once will have a huge negative impact on your credit score.  You need to be aware of your credit limit and your current debt levels to avoid this.

#5 Pay Off Any Overdue Accounts ASAP

Paying off a collection account will not remove it from your credit report, so do your best to avoid going to collections.  If you have any overdue accounts that have gone to collections, negotiate to pay them off ASAP.

#6 Reduce Your Debt

Easier said than done, but if you want to increase your credit rating, you need to reduce your debt. The closer you are to your credit limit, the lower your score. In a perfect world you only want to use about 30% of your available credit.  If you have a lot of credit card debt you might consider a loan (with lower interest rates than the credit cards) to consolidate your debts.

#7 Limit Your Inquiries for New Credit

You lose points from excessive hard inquiries on your credit bureau. Any attempts to take on multiple loans/credit cards will look bad in your report.

#8 Avoid Closing Credit Cards

Account age is a factor that reflects positively on your credit score. Too many new accounts lowers your average account age and negatively impacts your credit score. For the same reason, you may want to keep an old account open, even if you are not actively using it.

#9 Time is your Friend

When rebuilding your credit, time will be your best friend.  The impact of past credit problems lessens with time, so that a late payment from a year ago will have much less weight than a late payment today. Get current and stay current.

#9.5 Protect Your Credit from Identity Theft

As more of our personal information gets circulated via the internet, there’s more room for “bad people” to steal your personal details so that they can make fraudulent purchases in your name.  This can be extremely damaging to your credit history. You can protect your credit history from this by paying for a service that can alert you to fraud.

Mortgages are complicated… BUT they don’t have to be!  Engage an expert.

Give me a call and let’s discuss a mortgage that works for you (not the bank)!

Kelly Hudson

Mortgage Expert

Mortgage Architects

Mobile 604-312-5009  

Kelly@KellyHudsonMortgages.com

www.KellyHudsonMortgages.com

Kelly Hudson
MORTGAGE ARCHITECTS
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