Was giving your credit score a boost one of your New Year’s resolutions? Well, now’s the time to cross that goal off the list.
But wait! Doesn’t making positive changes to your credit score take… forever?
Not always! While the biggest improvements to your credit can take a longer period of continuous, habitual change to really show their full benefit, there are plenty of ways to start bettering your score right away. Let’s be clear about one thing, though: in financial terms, “right away” means within a year or so. There’s not really a viable way to make tens or hundreds of points’ worth of change to your score in a day or a week. However, you can get the jump on some important strategies for changing your score as soon as you’re done reading this blog.
Get a Report
Before you go about cleaning up your credit and boosting your score, you’ll need to know exactly where you stand. To do this, you will need to request a copy of your credit report. These can be obtained from the two major Canadian credit reporting agencies, Equifax and TransUnion. You are entitled to receive a free report once every 12 months, but if you want another report within that period there is a small fee. It’s information that’s highly worth having!
Check the Score
Once you’ve received your credit report, the easiest and fastest way to get a few points’ worth of improvement is to check it for errors. According to an American Federal Trade Commission study, about 5% of consumers have errors on their credit reports bad enough to result in a higher price for a financial product or insurance. If you notice any errors or incorrect information, contact the credit bureaus and ask for a correction, which must be addressed by the bureau within 30 days. Errors could include someone else’s information in your file, debts listed that aren’t yours, debts that have been paid in full and incorrect payment history.
Apply For a Secured Credit Card
It may sound like a bit of a paradox, but one of the most important factors in building a strong credit score is that you have access to, and use, credit! This can be hard to do when your score is low, because your eligibility for credit will be reduced. However, there are products that are designed to give people with little to no credit history or very poor scores some access to credit. One of these types of products is a secured credit card, for which you pay a fee that acts as collateral in return for access to credit. Conscientious use of this card – being careful to regulate your spending and never, ever max it out or go over your limit – will be a huge step toward improving your overall score. There are many such products offered by major financial institutions that you can look for right away.
Pay off Your Balances
Is there a balance lingering on your credit card? Holiday bill or two sticking around your inbox unpaid? If your budget allows for the full payment of even one such outstanding balance, your credit score will see a direct improvement. Paying off balances on time and in full is possibly the best thing you can do to boost your score! It can also be one of the toughest, because you will need to take a calculated look at your financial situation to determine what you can afford to pay off. However, the less debt you have outstanding, the less impact interest payments will have on your savings, which means the cumulative benefit over time is huge!
Increase Your Credit Limit
A lot of people think that increasing your credit limit just means giving yourself the opportunity to spend beyond your means. But this is not always the case. Increasing your credit limit can have a number of upsides if you manage your credit wisely, but mainly it will lower your overall credit utilization and increase your score provided you keep your utilization low and make your payments on time. You can call your credit card issuer to see whether they may be able to increase your limit – if approved, this change will have a fairly immediate effect on your score.
When in doubt you call always call Progressa! Click here to learn how we can pay off your bills and help rebuild your credit score.