When you go to a creditor in order to get a loan, the first thing they want to know is your credit rating. A credit score is something that summarizes your credit history including your present financial condition. This is basic credit scoring, but there are certain areas of credit ratings that most people are unaware of. Following are some of them:
- Something as simple as paying your bills on time is something that could actually enhance your credit score.
- It is not only your financial history, but also a bad public record that can lower your score by a good margin.
- A bad credit score can even cause hindrance in getting the desired job. Many employers judge professionalism on the basis of how you manage your life – most importantly, your finances!
- If you have a good credit limit, you don’t have to use all of it. It is recommended to keep within thirty percent of your credit limit to keep your credit score in a good condition.
- Clearing your mortgage does not help in improving your credit score. Instead, when you’re not paying mortgage (even due to the fact that you have cleared the full payment on it), your credit points get reduced.
- Those old accounts that you no longer use might still be of use. The main reason for this is because your new creditors will feel safer when they get to see your long, healthy credit history. Unlike common belief, shorter (even though clean) credit history is not as good as a longer (and fair) one.
- Opting for a secured credit card is a better option for starters as compared to choosing an unsecured one, right away. In most cases, taking an unsecured credit card is not an option for people having no credit history.
- Don’t focus all your credit on a single loan instrument. Try to keep a mixture of different products like a credit card, a car loan, and a home mortgage etc. Focusing all your credit at one instrument is not considered very healthy.
- Looking to rent a place? Even landlords take a look over your credit ratings before renting the place, just to make sure that you don’t default on the rent payments.
- A credit score above 650 is considered a good score.
- In Canada, Equifax and TransUnion are the only agencies for credit reporting.
- Even staying at a single place for a longer period of time can improve your credit ratings.
- Try sticking to one or two credit accounts at most. This will help you manage your finances in a better way as opposed to having a lot of accounts. Furthermore, make sure your accounts have very little to no balance. This will help you in maintaining or even improving your credit score.
There are a lot of things that affect your credit scores. Therefore, to maintain a good one, you should be aware of most, if not all, of the factors that help in building a good credit rating. Damaged your credit rating already? Contact GTA Credit Solutions Services Ltd. (GTA CREDIT) to help you in getting your credit scores back on track.