Need Help Fixing Your Credit?
Whether you’re looking to buy a new house in the near future, rent your first car or your first apartment, news flash: you need a good credit score.
That’s why we decided to write the complete 7 step guide to help Canadians repair their credit quickly without the hassle of having to “wonder” what actually affects your credit score. Whether you have a bad credit score or an average credit score, this guide will be useful for you!
How To Repair Credit Quickly? – A 7 Step Guide
Follow our easy 7 step guide to repair your credit quickly in Canada:
1. Pay Your Bills On Time
Although you may be tired of hearing it, it’s no secret that paying you bills on time may be the most important factor in your credit score.
If you’re used to paying your bills at the last second (meaning on the day your payment is due), we strongly recommend that you start paying your bills a few days in advance with automatic payments (or manual). By doing so, you make sure that your payment will be cleared on time for the due date.
2. Create A Budget To Better Manage Your Money
If you’re having troubles with paying your bills on time, it’s possible that it’s because of money mismanagement.
Having a solid budget that you follow on a weekly basis will help you have your bills paid on time and help clear up some of the common money management mistakes.
3. Aim To Use 30% Or Less Of Your Credit
It’s also very important to use less than 30% of your whole available credit at any time during your credit statement.
This is called credit utilization rate. Long story short, the credit utilization rate is the credit that you’re using during a period divided by the total number of your available credit (credit cards, credit lines, etc.).
Example: If you have 2 credit cards with a total of 10 000$ of credit available on them, you should never use more than 3000$ on those (or 30% of 10 000$).
There are two main ways to keep your credit utilization below 30%:
- The first and easiest way to keep your utilization rate under 30% is by paying off your entire credit card balance before the due date! This way, you’ll always be able to have a credit utilization rate of 0% at the end of the month.
- Then, another popular way to reduce the credit utilization rate is by applying for more credit. Why? Because, if we take the example from above, with a 10 000$ total credit and 3000$ of used credit, you have a credit utilization rate of 30%. But, if you increase your credit card limit by 5000$, you now have a total credit of 15 000$ and a credit utilization rate of 20%.
4. Pay Off Your Credit Card Twice A Month
If you already pay off your credit cards once a month, you’re most likely already convinced that you’re doing the best thing that you can do for your credit score.
News flash: Not really.
In fact, the reality is that you must pay your outstanding balance at least twice a month to send the best signals to your creditors and the credit bureau.
Let’s look at the following example to better understand the importance of this:
Let’s say that you have one credit card with a 1000$ limit and you decided to use all 1000$. At the end of every month, you pay the entire balance at the due date (or one or two days prior). Since the payment processing can take from anywhere from 24 to 48 hours, your payment may not be processed on time and could send a credit utilization rate of 100% to the credit bureau!
To avoid this, we recommend paying your outstanding balance as often as you can. If you have a tendency to forget, you can always set up automatic payments.
5. Consolidate Your Debt
If you have a ton of different outstanding debt (credit cards, credit lines, etc.), you can consolidate your debt under a lower interest rate to easier the burden of debt and help you pay your bills on time. You can consolidate your debt through most financial institutions or private lenders.
Need Help Fixing Your Credit?
6. Dispute Errors On Your Credit Report
Did you know that errors on your credit report are possible?
And not only they are possible, the FTC reports that almost one in five persons experienced at least one error on their credit history.
An error on your credit score could be the crucial thing stopping you from a good credit score. The best way to dispute errors on your credit score is by doing it through credit bureaus such as TransUnion or Equifax.
The process is usually pretty straightforward but could take a lot of your time. If you prefer this being handled by a professional, click on one of the big green buttons on this page to book a free call with a credit repair specialist that could help you on your journey.
Once the error is disputed, you can expect the investigation to take up to 30 days (or more for more complex errors) and then, once it’s completely removed from your credit history, you’ll be free to start enjoying your brand-new corrected credit score.
7. Monitor Your Credit Score Closely
It’s super important to always monitor your credit score very closely.
You never know what error could creep into your credit report?
You can easily follow you credit score through the following service, it’s easy to register and, best of all, completely free!
Check your credit score now (for FREE)!
Bottom Line
To end this, let’s take a look at the factors that have the biggest contribution on your credit score:
- Utilization rate of your credit.
- Pay your bills on time.
- Your credit limit.
- Budgeting.
- etc.
Quickly repairing your credit score is not that hard when you apply all of the tips from this guide. However, if you need more help, we recommend you jumping on a FREE call with a credit repair specialist near you by clicking on one of the big green buttons on this page.