Credit Improvement Montreal
Compare and Save With Loans Canada
Written by Lisa Rennie
Best Credit Improvement Montreal (Online) July 2021
Note: Loans Canada does not arrange or underwrite mortgages or any other financial service. We are a simple referral website that provides free educational resources to help Canadians make better decisions.
Do you find that getting approved for a new loan or credit product in Montreal is more difficult than you thought it would be? If you were able to get approved, are the interest rates charged often quite high?
It could be that your credit score is the reason for such challenges. The thing is, your credit score plays a key role in your ability to secure loans and get lower interest rates.
If your credit score is currently lagging, it might be time to work toward credit improvement in Montreal.
Montreal Credit Score Ranges
Understanding exactly where your credit score falls is important, as the number can define your ability to secure a loan or new credit. Further, your credit score can also determine the interest rate that a creditor or lender will offer you if you do get approved. Generally speaking, higher credit scores mean lower interest rates, while lower scores mean higher rates.
In Canada, Equifax and Transunion are the two major credit reporting agencies, each of which has its own approach to calculating credit scores. That said, they still report similar results. In Montreal, credit scores fall within the range of 300 to 900, with 900 being a perfect score.
To help you understand what each credit score range means, consider the following:
780 and above – Excellent. Consumers with a credit score of 780 or higher are considered to have excellent credit and will have an easy time getting approved for loans with favourable terms and low-interest rates.
779-720 – Very Good. Close to perfect, credit scores within this range will provide consumers with the opportunity to enjoy some of the best interest rates that lenders have to offer.
719-680 – Good. Consumers with credit scores that fall within this range are considered to have good credit and will usually have no issues getting approved for new credit and loans.
679-620 – Average. Consumers with credit scores within this range should still be able to get approved for new credit, though they may be offered slightly higher interest rates compared to those in higher credit score brackets.
619-580 – Poor. Lenders perceive consumers with credit scores within this range to be higher risk. As such, loan approval is not as likely. Even if loans are approved, the interest rates associated with them will likely be much higher.
579-500 – Very Poor. Consumers with very poor credit have a minimal chance of securing new credit, though they can take steps to make improvements.
Less than 500 – Terrible. New credit cannot be obtained with a terrible credit score. In cases like these, credit improvement in Montreal should be sought.
Factors That Affect Your Credit Score
What is the Purpose of a Credit Report?
A credit report provides detailed information about a consumer’s credit history that is prepared by credit bureaus, including Equifax and TransUnion. These credit bureaus collect credit-related data and generate credit reports accordingly for lenders and creditors to review in an effort to determine a consumer’s creditworthiness.
Lenders and creditors are not the only entities that can access and look at credit reports, however. There are others that may be interested in reviewing these reports, including the following:
- Credit card issuers
- Potential employers
- Utility companies
- Cell phone providers
Wondering which credit bureau lenders check in Canada? Find out here.
What’s on a Credit Report?
Several things on your credit report will be seen by lenders and creditors, and they also affect what your credit score will be. So, what exactly can be found on your credit report?
Personal information. Pertinent details of your personal profile are included on your credit report, including the following:
- Full name
- Current and previous addresses
- Current and previous phone numbers
- Social insurance number
- Driver’s license number and info
- Passport number (if applicable)
- Current and previous employers
For information about credit checks for jobs in Canada, click here.
Credit history information. In addition to your personal information, your credit will also be included on your credit report, including the following:
- Credit accounts and their associated transactions
- Mobile phone and internet accounts
- Black marks as a result of fraud
- NSF notes
- Legal judgments
- Credit accounts in collections
- “Hard inquiries,” or credit pulls from lenders, creditors, employers, and landlords
- Identity verification
How Long Does Certain Information Stay on Your Credit Report?
Different items will stay on your credit report for different periods of time. Here is a brief rundown on items that will be found on your report and how long they stay there:
- Credit accounts that were paid off on time and in good standing: 20 years
- Loans, credit cards, and lines of credit: 6 years
- Secured (collateralized) loans: 6 years
- NSF (non-sufficient funds): 6 years
- Closed accounts as a result of fraud: 6 years
- Credit inquiries: 3 years for Equifax, 6 years for TransUnion
- Legal judgments: 7 years
- Accounts sent to collections: 6 years
- Liens: 6 years for Equifax, 5 years for TransUnion
- Single bankruptcy: 7 years
- Multiple bankruptcies: 14 years
- Consumer proposals: 3 years
- Debt management programs: 3 years for Equifax from the date paid, or 6 years if not yet paid. For TransUnion, the DMP is not noted, but records of each of the accounts associated with DMPs are kept for 2 years following the date paid, or 6 years from when the account first became delinquent, whichever is sooner.
- Remarks: 6 years
What is a “Hard Pull” vs. a “Soft Pull”?
There is a difference between a hard and a soft credit pull:
Hard pull – A hard pull occurs when a creditor or lender reaches out to a credit reporting agency to review your credit report. The information contained in the credit report will be used to determine your creditworthiness. Hard pulls are usually triggered when a loan or credit is applied for and can cause your credit score to dip temporarily.
Click here to find out how applying for new credit affects your credit score.
Soft Pull – A soft pull occurs when a non-credit entity checks your credit report. These do not have any impact on your credit score and will not be noted on your credit report. If you pull your own credit report, this will also be classified as a soft pull.
Top Habits That Are Ruining Your Credit
Considering how important your credit score is to your ability to secure new credit, it’s important to keep it as high as possible. However, you may be inadvertently doing things that are pulling your score down, including the following:
Missing debt payments – Whether it’s your mortgage, car loan, student loan, or personal loan, missing payments that you’re obligated to pay every billing cycle is the biggest culprit behind poor credit scores.
Too many credit checks – Applying for too many credit cards within a short period of time can result in a number of hard inquiries that can pull your credit score down.
Too much debt – Some debt is actually good for your credit, but having too much debt can prevent you from securing more credit, even for necessary things such as a home or a car.
Maxing out your credit cards – Spending up to the limit on your credit cards increases your credit utilization, which is the ratio between your credit limit and how much you spend against it. Maxing out on your credit cards can be detrimental to your credit score.
This is how the money you owe affects your credit score.
Not using a credit card at all – If you don’t use a credit card and make timely payments, you won’t be showing potential lenders your ability to be responsible with your credit. While this won’t necessarily bring your score down, it also won’t do any good, either.
Closing out paid accounts – Just because you paid off an account doesn’t mean you need to close it out completely. In fact, doing so can be bad for your credit.
Will paying off your credit card bill help increase your credit score? Click here to know.
Not having a variety of debt – A small amount of debt and making timely payments toward it can help you build good credit. In fact, having a variety of debt plays a key role in how your credit score is calculated.
Everything you need to know about how your credit score is calculated. Click here.
Changing Your Spending Habits to Improve Your Credit In Montreal
Out-of-control spending can cause your credit score to tank if you’re not careful. If your credit score is suffering as a result of overspending, it’s time to do something about it. Luckily, there are things you can do to change your spending habits for the better:
- Create a budget
- Increase your income
- Pay down your debt
- Have errors on your credit report investigated and rectified
- Use cash when spending
If all else fails, there are professional credit improvement services in Montreal available that can help you get your spending habits on track and give your credit score a boost.
Read this article to learn more ways of improving your credit score this year.
Credit Building Products
There are plenty of things you can do to improve your credit score on your own. However, if you’re having trouble, there are several professional credit building products you can take advantage of to repair your credit score, including the following:
- Secured credit card – By putting a cash deposit as collateral, a secured credit card is easy to get approved for and can help you build good credit.
- Credit Rehab Savings Program – This type of program allows you to save up money while rebuilding your credit score.
- Credit counselling – Work with a counsellor who can help educate you on what you need to do to improve your credit in Montreal.
- Debt consolidation program – These programs can help you refinance your debt by lowering your overall monthly payments or reduce the interest rate on your current debt.
Credit Help When You Need it
If you’re looking for credit improvement in Montreal and aren’t sure where to start, Loans Canada can help match you with a credit product that best suits your financial situation. When all is said and done, you can end up with good credit that will strengthen your ability to secure credit in the future. Apply today!