Although repairing a bad credit rating is possible, it’s much easier to maintain a good credit score straight from the start. Having a good credit score exposes yourself to many benefits such as decreased interest rates on loans and credit cards. Along with having a solid credit rating you will also be able to save your hard-earned cash on security deposits and insurance charges. In order to maintain a good credit score you must use your existing credit wisely to keep your score up. To get you well on your way to a secure financial future here are a few handy tips you could take advantage of to start building your credit or maintain your already high score.
First step is undoubtedly to check your credit rating by ordering a credit report. You can order a report via Equifax. If there seems to be inaccurate information represented in your credit report then go ahead and contact the Canadian FTC (Federal Trade Commission) to resolve any issues and clean up your report.
Next, you want to move on and understand what makes up a good credit score. Understanding what determines your credit score will make it easier for you to maintain it. There are five guidelines that are used by lenders to calculate your credit score:
– Amount of debt
– Payment schedule/history
– How long you’ve had credit
– What types of credit you have used
– Recent credit
If you have not yet established a credit rating or are just beginning to build it and you are looking for a loan then it might be worthwhile to take advantage of the good credit of someone else you know. For example, if your parents or a spouse have good credit then have them co-sign a loan for you. This is how most young people establish a good rating and are accepted to a program with a higher credit standard.
It is noteworthy to mention that if you wish to maintain your good credit rating it is extremely important to keep your credit balances below 30% of your limit. You should also pay off you credit bill in full each month. Also, you have to be accountable of not just your credit card balance but your entire debt. Credit cards are not the only accounts that affect your credit score. Hold yourself accountable to manage any loan balances or lines of credit to ensure that you can afford all monthly payments. By decreasing your debt you will have a much easier time keeping your good credit score.
Lastly, always limit the amount of applications you submit for new credit. Each time you submit an application for a loan or credit card your score will suffer a small penalty. In order to keep a solid credit score, you should only open new credit accounts if it is necessary.
Just because you follow all of the guidelines laid out above does not mean your credit score will go unaffected. Crimes such as fraud and identity theft can lead to a decreased credit score. For this reason, periodically checking your credit report will allow you to detect any mistakes much quicker and have them corrected as soon as possible to maintain your good credit score.