Living in St.John’s has its many benefits, but like the rest of Newfoundland, St.John’s residents struggle with debt. Both overall debt and delinquency are rising in the province. While this isn’t always the case, it’s quite common for debt troubles to then lead to credit troubles.
Unfortunately, having bad credit and a low score can make it hard to take out a loan in St.John’s, which can be necessary for things like buying a home or a car. Thankfully, it is possible to improve your credit in St.John’s. Not only that but if you change your habits, improving your credit quickly (within only a few months) is within the realm of possibility.
Check out this infographic to learn all about how your credit score is calculated.
Factors that Affect Your Credit Score in St.John’s
However, before we look at how to improve your credit in St.John’s, we need to know what goes into your credit score. In total, there are five different factors that affect your credit in St.John’s and the rest of Canada. Each has their own “weight” as well, so certain things matter more while others aren’t very important. The factors are:
History of Payments (35%)
Your payment history is the largest factor when it comes to how good or bad your credit score is. If you have been good at making payments on time and not missing many, your credit score will likely be higher. But if you have a history of missing payments or not making payments in full, your credit score is likely going to take a hit.
Debt Owed (30%)
The amount of debt that you currently owe is another large factor is your credit score. If you are carrying a high amount of debt, there is a good chance your credit score will be lower. So if you make strides to eliminate and pay off your debts, you will notice your score begin to rise.
Credit History Length (15%)
The amount of time that you have been responsibly using credit in St.John’s will also factor into how good your credit score is. The longer a credit account has been open, the better for your credit score. This is because it shows that you have a long history of using credit and aren’t brand new to it. You will be seen as less risky among lenders in St.John’s if you have been using credit for years, as well.
New Credit (15%)
Frequently applying for new credit in St.John’s can also have an impact on your score. Every time you apply for new credit, a hard pull of your credit report is performed. This will result in a slight drop in credit score for a short period of time. As a result, it’s not a good idea to apply for a lot of credit cards or loans at the same time.
Types of Credit Used (10%)
Using different sorts of credit can be more beneficial to your score than others. For example, using a credit card from a major financial institution will get you a better score than a cheap one from a retail store. Also, using a variety of different types of credit can also increase your score in St.John’s.
Looking for debt management advice? Check this out.
Tips to Improve Credit in St.John’s
Now that you know what goes into your credit score, we can begin to look at a few tips to improve your credit. While it won’t happen overnight, there are several different things you can do to improve your credit in St.John’s. These include:
- Creating and using a budget to track your spending and payments
- Increase your income so that you can pay down your active debts
- Paying down your debt, even just making small payments, can go a long way
- Get a copy of your credit report to ensure there are no errors
- Use your credit card responsibly, try and keep a utilization rate of under 30%
If you do these things, you will soon see your score begin to increase. While some of these are easier said than done and will take some sacrificing, having a higher credit score will be more than worth the effort.
Want to know how bad credit can affect your daily life? Click here.
Credit Building Products in St.John’s
While some people in St.John’s can use the aforementioned tips and get themselves out of credit trouble, others might need a little bit of help. Thankfully, we offer a variety of different credit building products that can help you improve your credit score quickly and easily.
One example of a product that can help build your credit is getting a secured credit card. This is a credit card that uses a cash deposit, so it allows you to make purchases and build credit, without putting yourself at risk as the cash has already been put up.
Another credit building product you could take advantage of is credit counselling. This will involve working closely with a professional in St.John’s who will help you come up with a financial plan. They can help you budget, help you prioritize and do so much more to help improve your finances.
Other options include things like debt consolidation and a Credit Rehab Savings Program. Whichever option you choose, you can rest assured that the person or company you work with will be able to help you every step of the way.
For more information about these credit building products and programs, read this.
The Right Credit Improvement Strategy for You
Looking to improve your credit but need some assistance? If that’s the case, feel free to reach out Loans Canada for help. We will be able to get set up with the best credit building products in St.John’s.
