5 Tips for Repairing Your Credit Score

5 Tips for Repairing Your Credit Score

Worried that bad credit will dash your dreams of home ownership? In North Vancouver, Rala Investments Ltd. can make a difference. We’re a private mortgage broker helping even the most unlikely candidates buy homes. While we can help you secure a loan even with your current credit score, it’s always best to repair your bad credit first. You’ll get a much better rate and save substantially in the long run. While there’s no overnight cure for bad credit, over time you can vastly improve your score. Here are five key methods for making the desired repairs.

1. Pay your bills on time
Your payment history makes up 35% of your credit score. Always pay your bills in a timely manner and you’ll see significant improvements to your credit. If you have a hard time with this, consider setting up automated payments out of your bank account. The only caveat is you’ll have to be sure to have enough money in your account to make all your payments.

2. Keep credit card balances low
Getting and using a credit card is important for those who wish to establish a decent credit score. But keeping your balance low will garner the best results. How low? The ideal range is somewhere between 10 and 20 per cent of your available credit.

3. Don’t close your oldest card
A long history of having credit works in your favour. But close that credit card you had your first year in college and those brownie points vanish. Therefore, even if the interest rate is high, it can be very worthwhile to keep your oldest card open. Use it a couple of times a year for small purchases so it doesn’t become inactive.

4. Look out for errors
Errors on credit reports are more common than you might think and can impact your score by 50 points or more. Always keep an eye out for mistakes or typos when you get your report. Don’t know how to obtain a credit report? Getting one is actually quite easy. All you need to do is get a hold of one of our two national credit bureaus; Equifax Canada or TransUnion Canada. Reports can even be obtained free of charge once a year, if you order them by mail.

5. Mix things up
It’s a good idea to have more than one type of credit to your name. A small personal loan or financing a piece of furniture can give you that little bit extra that you need to up your credit score.

Get personal advice from Rala Investments Ltd.
A mortgage broker can help you assess your financial situation and offer tailor-made advice for your particular situation. Contact our North Vancouver office today to schedule an appointment.