Fixing your credit score isn't just a single step event, but a series of actions that aim at improving your credit rating.
It is possible to fix your credit in Canada if it gets damaged by unforeseen financial difficulties. Millions of Canadians have problems with their credit rating making it tough for them to obtain favorable loans. This process takes time and requires commitment and self-discipline by the borrower. Fixing may sound like a quick solution to your bad credit, but it doesn't come easy. The few tips below can give you a head start.
Eliminate collections from your report
It is possible to pay off the collections and ask for the creditors to remove their collection notations from your credit report. Most of the collections that appear on the public records part of the report are items such as unpaid utility bills, cell phone bills, cable bills, telephone bills, parking tickets and other debts, which were not initially a credit account. This action boosts your payment history.
Reduce credit card use
Your score can be affected if you accumulate huge credit card balances irrespective of whether you pay them fully at the end of every month. The balances on your last statements are what are reported to the credit bureaus when calculating your credit score. Limiting usage to 30% of the credit limit can increase your score. You can set a reminder for the credit card company to notify you when you approach the limit.
Get goodwill from the lender
If you are a good customer, the lender can agree to remove that single late payment from your payment history. You can do this in writing, however, ensure that you have been meeting your financial obligations dutifully lest the lender sees it as mischief. You can do this if you have previously made at least 12 consecutive timely payments without fail.
Dispute errors in your report
A single mistake could have adverse effects on your credit score. Ensure you get at least one free credit report from your credit bureau at least once a year. Go through it carefully and ensure your credit is reported correctly. Any anomalies must be corrected within the shortest time possible.
What is a credit score in Canada
If you are one of the many people who is asking about what is a credit score Canada, then you definitely should read the information below.
It is always important to monitor your credit score for you to know where you stand when it comes to lending companies. Fortunately, you can now check your credit score for free with the use of Borrowell because they have partnered with Equifax Canada. Get to know more about these two companies by reading the information below.
Borrowell
Borrowell is a fintech lender company in Canada which offers fast, friendly, and fair loans to people who need it the most. They have fix interest rates that are affordable.
Equifax Canada
Equifax gathers credit reports, which include your payment history, your debts, and the length of the credit that you already have. They have grown from a credit consumer company to a leading provider of credit score around the globe.
How are credit scores calculated in Canada?
In Canada, credit scores are calculated to show your creditworthiness which is useful for the lending institutions to identify the level of risk involved in lending you loans such as mortgage or home loans. The credit score ranges from 300 to 850. Higher the score, better are chances of you repaying your loans and hence, lower the risk for the lenders.
The credit score is determined by giving your payment history the 35 % weight. Followed by, the amount you already owe as 30%. The weight of 15% is given to the length of your credit history. The new credit applications that you have made and the type of credit that you have used in the past account for 10 % each.
Explanation of credit score ranges in Canada
Knowing the explanation of credit score ranges in Canada is essential for you to understand them fully well.
Getting your loan or credit card approved will depend highly on your credit score. Not everyone is familiar with the ranges of credit score in Canada, which is why familiarizing yourself with them is important. Below are the credit score ranges that you need to know.
Poor
Poor credit score ranges from 300 to 559. According to a study, almost 4% of the population in Canada has this score. This can cause difficulties when applying for loans and credit cards.
Good
Good credit score ranges from 660 to 724. 15% of the population has this score. This credit score can help you to obtain a loan or a credit card but with added requirements.
Excellent
An excellent score ranges from 750 and above. 57% of the population has this score. They can quickly obtain every loan or credit card that they need without providing requirements.