Mortgage Blog

Tips to Fix Your Credit

October 7, 2018 | Posted by: Jatinderbir Singh Bajwa

Any outstanding debts or neglected credit card balances can result in you having a lower than average credit score. Having bad credit can increase your interest rate when applying for car loans or a mortgage. But don’t worry, building your credit score back up can be done if you take the necessary steps. Here are five things you can do to fix your credit score.

Pay Off Outstanding Balances

The first step to improving your credit score is to pay off your card balance. If it’s possible, it’s best to pay it off all at once to speed up the health of your score, but don’t worry if you can’t. Pay slightly more than the minimum balance every month to ensure a decrease in outstanding balances. During this time, try not to increase your card balance with any unnecessary purchases, as this will negate the process of lowering your overall balance.

Pay on Time

Don’t skip a month or two between paying back your credit debt, as late payment reflect badly on your credit score. It’s always best to make the minimum payment instead of not paying at all. Payments made on time is the most important factor when trying to improve your score. Without consistency, it will never reach the optimal level it needs to be at to get approval for mortgages, loans, rentals and more.

Review Credit Reports

Contact credit bureaus like TransUnion and Equifax to get your free yearly credit report, or use other free services like Credit Karma to access credit reports at any time. Find out where you stand regarding your credit before making any moves to change it. You may think you have a horrible score when in reality, your credit score is above average. Scores will range from 300 to 850. If you find yourself sitting between 700 and 740, then you don't need to worry.

Dispute Errors

Mistakes on your credit reports aren’t common but they do happen. When they do, make sure to clear them up by making sure your personal information and credit history are correct. Review the credit cards listed to make sure they’re accurate, along with the matching purchases. If you detect errors such as incorrect late payments or purchases that aren’t yours, highlight them and make copies before sending them to your credit bureau to investigate.

Increase Credit Card Utilization

The ratio of credit available to what you’ve already spent makes a difference regarding your overall credit score. If your ratio is sitting at 50:50 or you’ve spent more than half of your maximum credit limit, it will negatively impact your score. A quick way to remedy this is to increase your limit, so you have more money available than you owe. The key to this tactic is not to spend the additional funds, as you’ll only put yourself deeper in debt.

 

At Avon Financial, we’re the top mortgage brokers in Brampton, Ontario who will match your financial needs with Canada’s leading mortgage lenders. Our team is happy to help anyone in Brampton, Orangeville, Guelph and other surrounding areas with home mortgage purchases, credit improvement, debt consolidation, mortgage refinancing and more. Our brokers are constantly learning about updates in current market trends, rates and regulations to provide you with the most accurate information. Call today and set up an appointment with one of our qualified mortgage brokers.

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