Improve Your Credit Score and Credit Rating

Five Ways to Boost your Credit Score

There's no doubt that the better your credit score, the fewer hurdles you’ll have  when looking to renew or refinance your existing mortgage, or obtain a new one:

6 Steps you can take to improve your credit score:

1) Pay down your credit cards.  Revolving credit like credit cards seems to have a more significant impact on your score than car loans, lines of credit, and so on.  The number one way to increase your score is to pay down your cards to 30% of their limits.

By paying down your cards to 30%, you are leaving a big gap between what your limit is and what you owe – a move that is very favourable to increasing your credit score.

2) Curtail the use of your cards.  Don't use your credit cards as a form of loan.  If you know you won't be able to pay off your balance at the end of the month - reconsider whether you really need that consumer item!   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 paid it all off the next month.

3) Review your credit file regularly.  Make sure your credit file is kept up to date.  Old bills that have actually been paid off can come back to haunt you.

4)  Make sure your payment will be received on time!  When using online or telephone banking, pay about 5-7 days before the due date on your statement to ensure the payment is received on time – it can take up to five business days for a payment to be received.  Increasing the gap between your credit limit and your closing balance should boost your score.

5) Keep your old cards.  Older credit is better credit. If you stop using those older credit cards, the issuers may stop updating your accounts. As such, they will lose their weight in the credit formula and, therefore, may not be as valuable – even though you have had the card for a long time. Use these cards periodically and then pay them off. 

6) Don’t let mistakes build up. Dispute any mistakes or situations that may harm your score. If, for instance, your 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.