Too many negative factors on your credit rating can make it extremely difficult to obtain a mortgage or loan. Unfortunately, once negative information lands on your credit report, it can remain on for at least seven years and be very difficult to remove. There are a few ways you can work to increase your credit ratings but it’s a matter of trust. You must work to establish trust with creditors and lenders again. Here are 6 great ways to increase your credit rating, in time.
1. Correct Your Credit Report
A copy of your credit report can reveal so much. Once you obtain a copy of your credit report, scour it for any wrong information, Contact your creditors and lenders with problems you see, and an explanation as to why. Once your credit report is corrected, work to pay off bills in full if possible.
2. Keep Open Credit Cards with $0 Balances
If you have a credit card that’s paid off, keep it and don’t use it. It can keep your credit score up. If you have 2 credit cards worth $5,000 together and $0 balance on one, and $1,000 balance on the other. You are only using 25% credit total. Without the $0 balance card, your credit use doubles, going over the recommended 30%.
3. Reduce Credit Card Use
Credit card use can hit your credit score negatively. This is especially true if you’re prone to late or missed payments. Pay off your credit balances in full and reduce your credit card use as much as possible.
3. Pay Balances On Time and Consistently
If you pay your bills each and every month on time, your credit score will remain healthy. Set a reminder on your phone for your due dates or set up automatic payments to make your statement due dates. If you choose to use online banking, pay a few days in advance of the due date to ensure your payment is processed in time.
4. Stop Unnecessary Credit Inquiries
Put a stop to unnecessary credit inquiries on your credit report. Those hard credit checks, which include applying for a credit or a loan, hurts your credit score. Soft credit checks do not. Also, refrain from randomly applying for credit cards for sign-up bonuses, and canceling them when the bonus period expires. Each time you do can take up to ten points off your overall credit score.
5. Consumer Proposal
If you’re in debt, consider entering consumer proposal status. A consumer proposal is a legally-binding process executed by a Licensed Insolvency Trustee. Together, you will create a proposal to pay creditors a percentage of what is owed, extend the time to pay off the debts, or do both. Although this is an expensive process that can severely lower your credit score, it allows you to pay back your creditors. You can stay in consumer proposal for up to five years.
6. Consultancy to Help Increase Credit Rating
Contact me before considering bankruptcy, which can damage your credit for seven years. I offer consultancy services which will give you the right financial advice. Remember, if you are in bankruptcy, very few lenders will consider loaning you money.