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Renfi Capital is a lender that specializes in home renovation loans. It is the fastest mortgage lender in Ontario. They offer loans ranging from $25,000 to $150,000, with interest only payments at the low rate of 1% per month. Renfi works with a much wider range of credit types than conventional lenders.
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Your credit score is a crucial three-digit number that plays a key role in determining whether or not you’d be able to secure credit and loan products in Ontario and Canada, in general. If your credit score is less than 650, you’ll find it tough to get approved for car loans, mortgages, personal loans, and even cell phone contracts in Ontario.
If your credit score is currently suffering, you’d be well-advised to pursue credit improvement in order to get that number back to where it could be. Doing so will make your financial life easier in Ontario and will help you secure financial products in the future.
Want to know if you can get a loan with a credit score of 450? Find out here.
What Information is on Your Credit Report?
Whenever your creditors pull your credit report, they’ll be seeing a lot of important information about you, including your credit score. The purpose of a credit report is to provide creditors with pertinent information they need to make a sound lending decision. It also helps consumers themselves know exactly where they stand with their credit.
Here is some of the information that your credit report will contain:
- Personal information:
- Your full name
- Your date of birth
- Your address
- Your telephone number(s)
- Your social insurance number (SIN)
- Your driver’s license information
- Your passport number (if applicable)
- Your employer(s)
- Information about your credit accounts and their transactions
- Cell phone accounts
- Internet services accounts
- Black marks
- Public records
- Accounts in collections
- Credit requests (“hard inquiries”)
- Notes about fraud or identity verification
Check out this infographic to learn how your credit score is calculated.
How Long Does Negative Information Remain on Your Credit Report?
Negative information can definitely pull down your credit score, but it won’t stay on your credit report forever. Depending on the exact type of information, it can stay on your report for as little as a few months to a few years.
Having gone through bankruptcy is the worst thing for your credit, and can stay on your report for anywhere between 7 to 14 years, depending on the number of bankruptcies you’ve filed.
For a more detailed article about credit report information, look here.
What’s the Difference Between a “Hard Pull” and “Soft Pull”?
When a creditor in Ontario pulls your credit report after you apply for a loan, this is referred to as a “hard pull.” It can cause a temporary dip in your credit score.
On the other hand, a “soft pull” is when a consumer pulls their own credit report and does not cause any decrease in credit score.
Read this to know more about credit inquiries.
These Habits Are Pulling Your Credit Score Down
You want to improve your credit score, not lower it. But some things that you’re doing could be pulling it down. Here are the top bad habits that could be preventing your score from climbing.
Missing loan payments. If you are in the habit of missing payments once in a while, your credit score will suffer. If your payments are late by at least 30 days, they’ll be reported to the credit bureaus and be marked on your credit report. This will certainly have a negative impact on your credit score, as payment history holds the most weight.
Made a late payment recently? Here’s how you can rebuild your credit.
Applying for too many loans or credit cards. Are you the type to apply for credit cards at every store you shop at? Have you recently taken out a car loan, personal loan, and unsecured credit card all within a short period of time? If so, lenders in Ontario will be pulling your credit report to see your credit, which will make your credit score dip, even if just temporarily.
Every time you apply for credit, a “hard inquiry” will be marked on your credit report. This is not good for your credit, which is why you should not apply for too many loans within a short time frame.
Click here to see more ways that your credit score is affected when you apply for new credit.
Carrying too much debt. Having too much debt on the books is not only difficult to pay down, but it’s also bad for your credit. Too much debt can also prevent you from getting approved for loans in the future because your debt-to-income ratio will be sky-high. Having large balances can have a negative effect on your credit report.
Maxing out your credit cards. Credit utilization refers to your outstanding balance on your credit card relative to your credit limit. The closer you get to spending up to your credit limit, the higher your credit utilization ratio will be, which is not good for your credit score. It’s advised not to spend any more than 30% of your credit card limit to keep your credit score healthy.
Closing out accounts. Another factor that contributes to your credit score is the age of your accounts. Generally speaking, old accounts are better for your credit score. If you close them out right after paying them off, you could actually be doing your credit score a disservice. Old accounts are good accounts and you should consider leaving them open, even if you’re not using them.
Look at this page to know how the types of credit accounts you have affected your credit score.
Credit Building Products in Ontario
Building credit in Ontario can be a time-consuming process that requires plenty of dedication and a little bit of sacrifice. With some hard work, you can definitely do it on your own, but sometimes it may be worthwhile to get some professional assistance building your credit up to where it should be. Luckily, there are several different credit building programs and products available that can help you with credit improvement in Ontario.
Secured credit cards. One of the best ways to build good credit is to make timely payments on your credit card. But what if you are unable to get approved for a traditional credit card? Like other credit products, credit cards require applicants to have decent credit in order to get approved. If you can get your hands on a product that’s supposed to help you build good credit, what are you to do?
Check out this infographic to see how bad credit can affect your daily life.
Fortunately, secured credit cards are much easier to get approved for in Ontario. They require collateral, which means there is less risk for the creditor. With this product, you would be required to make a deposit for a certain amount, which then becomes your credit limit. You are only able to spend as much as you’ve deposited.
Once you’re approved, you can continue to spend against the card and make timely payments every month, which can help you to build good credit and eventually be able to take advantage of many loan products in Ontario that requires good credit.
What’s the difference between a secured credit card and a prepaid credit card? Find out here.
Credit rehab savings program. This type of program in Ontario allows you to save money while rebuilding your credit score at the same time. There are no up-front fees required to get started and you don’t have to have good credit – or any credit at all – to get approved. Although you won’t get any cash right from the get-go, you will be able to access your savings throughout the loan term based on how much equity you’ve accrued. It’s a great way to get access to cash while building credit the affordable way.
Would you like some more information about credit rehab savings programs? Take a look at this.
Credit counselling. Many borrowers in Ontario may be completely unaware of exactly where to start when it comes to building good credit. In many cases, they may need some help getting their credit score up to snuff. For these borrowers in Ontario, credit counselling may prove to be very helpful and effective. With the help of a credit counsellor, you’ll get the support and guidance needed to make all the right moves for credit improvement in Ontario.
Credit counsellors will teach you what you need to do to improve your credit score. They may also help you negotiate with your creditors to reduce your debt load or lower the interest rate to make paying off your outstanding balances easier and quicker.
Shopping for low-interest rates? Consider this first.
Debt consolidation program. Do you have a variety of different loans that you’re required to make payments for every month? It can be pretty tough to juggle several loan payments all the time. And if you have several loans that have a high-interest rate – especially credit cards – they can be very difficult to pay down.
With a debt consolidation program, borrowers in Ontario can consolidate all of their debt into one single payment, usually at a lower interest rate compared to some of the other debt they have. Essentially, you’d take out one large low-interest loan to pay off all the others. This can make paying down your debt and inevitably boosting your credit score easier.
In the event that your debt consolidation loan application gets denied, read this.
I have bad credit. How can I improve my credit score?
What are the calculations for credit score?
Will my credit score decrease from a credit check?
Need Help With Credit Improvement in Ontario?
Improving your credit score certainly takes some due diligence on your part. But sometimes, it can be overwhelming and even confusing. If you need some help with credit improvement in Ontario, get in touch with the pros at Loans Canada today to discover all the products and programs available to give your score a boost.