Thousands of Canadians struggle with credit issues every year and most report not knowing what to do about it.
These are people who are struggling with bad credit, have been been turned away by the banks, and have recently been denied a loan. If these scenarios sound familiar to you, don’t worry, you’re not alone.
If you feel like your credit situation is hopeless, the worst thing you can do is give up. All it takes is a step in the right direction to turn your financial situation around. If you follow our 3 Tips to Improve Your Credit Score, you’re guaranteed to see a positive change soon!
#1: Label Your Worst Debt and Focus on Paying it Off
Take an afternoon to sit down and go over your finances. Write down every expense you have and determine which debt is costing you the most money. Hint: You want to look for one outstanding debt you’re paying the most interest on.
If you’ve acquired a lot of debt from multiple lenders, find the one where you’re paying the most money in interest and focus all of your attention there. By immediately bringing your most troublesome debt down you’ll be able to lower your date overall. If you continue to treat it the same as bills with lower interest rates, it’ll take you twice as long to make a dent. Focus your energy and get to work.
We know, it’s easier said than done. But fixing your credit requires some sacrifices. When you’re going over your finances, also figure out where you’re wasting money, or spending money needlessly. Cutting out a few dinners out per month can save you more money than you realize.
#2: Start Making On-Time Payments a Priority
The most important contributor to your credit score is your payment history. That means if you have a history of late payments or you’ve neglected to make a payment altogether, your credit score has suffered as a result.
Also Read: How is My Credit Score Calculated?
Make 2017 the year you never miss a payment. If you’re forgetful, set up automatic payments for your bills directly from your account. Even if you can only make the minimum payment, make sure you do it on time. After a few months, you’ll start seeing your credit score improve.
#3: Keep Your Credit Balances Below 35%
You want to make sure your credit card limits are manageable. If you have cards that have limits that are too high, call and have the limits lowered immediately.
You also want to bring your current outstanding credit card balances below 35% of your total limit. For example, if you have a credit card and the limit is $10,000, you want to keep your balance at $3,500 or lower. It’s not always easy to get there, but once you do, make maintaining that limit a hard rule for all your cards. It’ll make a big difference in the end.
Ideally you’ll want to keep your credit balance below 15%, but if you’re in a difficult credit situation then 35% is an okay place to start.
3 Tips to Improve Your Credit
Think of the New Year as a chance to turn your financial situation around. These 3 tips to improve your credit score will get you started in the right direction, but don’t forget there are lots of other things you can do.
If you need an auto loan but feel like your credit score is too low, contact us at Go Auto. Not only do we have our own in-house financing team that works directly with our customers, we also work with dozens of lending institutions in order to find the best possible financing rate for any situation. We have more tools at our disposal than most.