Having a good credit score is critical to secure low-interest rate loans. However, if your credit rating is suffering, you need to fix it as soon as possible by adopting well thought-out techniques. In Canada, a score of 300 is the worst, whereas 850 is the best standard. So make sure you get somewhere 700 to 850 to get into the positive zone at least. Once the scores improve, you will be able to enjoy multiple financial benefits, including easy loan approval, lower interest charges, etc.
Just make sure to remember that raising a credit score needs deliberation and patience. You can see a quick rise in the ratings if you have started building your credit score recently by paying off your credit card and other bills regularly every month. If you own multiple credit cards with little or less usage, then your debts will be comparatively lower than your credit, and hence, your score will increase. But if you are heavily indebted, then you need to clear all your bills soon to change your debt-to-credit percentage effectively.
In this context, it is essential to mention that you may have to wait longer to elevate your credit score if it has suffered because of your wrong financial decisions or steps, such as defaulting on payments, bankruptcy, and others. These cases delay the scope of credit score improvement by months and sometimes years.
How to raise your credit score?
You may have to allow a few months to go by until you start to notice a substantial difference in your credit report. Nevertheless, here is a quick guide on what you can do to increase the ratings.
Look for errors in the credit report
The credit report may have some errors due to inaccuracy in data or misinformation. So get your free report from Equifax or TransUnion and check the details thoroughly for any discrepancy that could be hurting your score terrible. In case you spot any, get it rectified by getting in touch with the respective customer care teams of the bureau through mail or phone call.
Talk to a creditor
You can meet a reputable creditor to request him to increase your existing credit line. It will also have a positive impact on your credit score. Or, you can convince them to report your debt as paid in exchange for a partial payment.
Become authorized user on other’s account
You can also speak to a family member with good credit score to make you an authorized user on his or her account so that your credit history also improves.
Consolidate your debt
Debt consolidation is another way of getting rid of a bad score. It’s a kind of lower interest rate loan that combines most or all of your payments into one economic payment for regular monthly processing or transactions. It can come in handy if you are facing an issue with tax or credit card payments or high-interest rates. There are well-established agencies that provide complete assistance in this matter.
Contain credit limit usage
Whatever credit limit you may have on your credit card, make sure you don’t use more than 30% of it. It is critical to keep your spending habit in check and also to take your monthly payments under control.
You can share these steps with your friend also who is in financial distress and help him refaire son crédit.