Becoming a regular credit user in Burnaby comes with plenty of advantages. After all, despite Burnaby being one of British Columbia’s fastest growing cities, it’s also one of the more expensive places to live as a result. Therefore, the ability to access credit cards, loans, and lines of credit can be a huge asset in Burnaby.
Then again, having unhealthy credit can make any of those same products more expensive and harder to get in Burnaby. In that situation, it pays to improve your credit whenever and however you can. Let’s take a look at some ways of doing just that.
Looking for the best rate for your line of credit? Read this to help your search.
As we said, your credit products, while beneficial in more ways than one, can also be one of the leading causes of debt, which can, of course, result in lasting damage to your credit when it becomes unmanageable. However, there are plenty of other unexpected situations and unhealthy habits that Burnaby borrower have that can lead to such results.
No matter what the root cause of your debt and/or bad credit is, the best thing to do is act quickly and try to resolve the situation. After all, obtaining what most lenders in Burnaby consider to be “good credit” will have a chain effect that both saves you money and makes you a more creditworthy borrower in the future.
Check out this infographic to learn about what affects your credit score.
When it comes to your credit products, one good habit to pick up is checking your credit report on a regular basis. That’s because lenders in Burnaby will usually send records of your payment activity to Canada’s two main credit bureaus; Equifax and TransUnion. This is the kind of activity that causes your credit score to fluctuate.
Your credit report is a detailed file containing all your credit-related actions over the past decade or so (times vary depending on the product). If you activate, use, or cancel a credit account, it shows up in your credit history and can be seen by lenders when you apply for new credit in Burnaby. If your report looks healthy and lenders see a low chance of risk, you’ll have an easier time getting approved and earning an affordable interest rate.
You’re permitted one free copy of your report per year from either Equifax or TransUnion (always check both versions). Although extra copies would cost a fee, it’s worth it to consistently review your report so you can monitor your progress and spot any errors, signs of fraud or identity theft.
Click here to see which errors most frequently appear on credit reports.
Ranging from 300 – 900, your credit score is the other element that most lenders in Burnaby will look at to judge your creditworthiness.
Being that your credit score plays such an important role in the borrowing process, it’s also good to know what factors affect it. Generally speaking, credit bureaus use a formula that factors in 5 different components.
Payment History (35%) – Making up the largest percentage of your score is your payment activity. Any payments you make on time and in full will make your score rise, while any short, late or missed payments will make it drop.
Debt Owed (30%) – The more unpaid debt you have in your credit history, the further your score will fall. This is most often seen with credit cards and other products with revolving credit limits, in which case the more available credit you use up, the worse it is for your score.
Do you know what your credit utilization ratio should be? Find out here.
Credit History (15%) – The older your credit accounts are, the better it is for your score, as long as you’re paying all your bills properly. For example, a credit card you’ve been using for years is better than consistently cancelling and applying for new card accounts.
New Credit (10%) – Another reason it’s best not to apply multiple times for any credit product is that each instance could result in a hard inquiry on your credit report and decrease your score by a few points. To many hard inquiries can make your score drop drastically, especially if you already have bad credit and keep getting denied.
Credit Types (10%) – It’s also good for your score to have a variety of credit products listed on your report. While one credit card can certainly help build and improve your score, using a loan or line of credit at the same time would be even healthier. Once again, this is only healthy if you have the ability to make payments as agreed.
So, it’s clear that building and, if necessary, improving your credit is an important part of being a healthy credit user. If that’s your goal, there are numerous remedies in Burnaby, including effective products and programs to help you build your credit.
For an in-depth look at how you can improve your credit score, check this out.
If you’re looking to improve bad credit or avoid it altogether, then you’ve come to the right place. We’re dedicated to helping you find the best credit improvement solutions in Burnaby. Give us a call for more information or apply below when you’re ready!
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