5 Easy Things You Can Do To Boost Your Credit Score

Do you know that your credit score is one of the most critical aspects of your financial life? It tells potential lenders how responsible you are when it comes to managing your finances and whether you pay your debts on time or not.

An excellent credit score can help you to qualify for low-interest loans and premium credit card rewards. Unfortunately, the journey to building a good credit score is not a sprint but a slow marathon. It takes time and a lot of effort to improve your score and maintain it at the top.

The good news is that there are lots of simple things you can do to improve your credit score. Here is a simple guide that will help you achieve a better credit score.


Stay on Top of Your Payments

Always strive to keep all your debts in the green zone to show lenders that you are responsible with your credit. According to Experian Canada, payment history is the most critical factor used to determine your credit score.

In fact, the company says that your credit score is basically a direct reflection of your ability to pay back your debts on time.  From a lender’s perspective, a well-established history of prompt payments is a good indicator you will handle your future debts responsibly, too.

Make sure you avoid things such as late payments, foreclosures, repossessions, and third party collections.  Anything that indicates non-performance is going to harm your credit score.

Aim for 30% Credit Utilization Ratio or Less

Credit utilization is a term used to refer to the portion of your credit limit that you are using at any given time.  It is the second most important factor in FICO credit score calculations after your payment history.

One of the easiest ways to keep your credit utilization ratio in check is to ensure that you pay your credit card balances in full every month. If you cannot afford to do that, then try to keep your balances at a maximum of 30% of your total credit limit.

Think Beyond Your Credit Cards

Most of us seem to associate the term “debt’ with our credit cards and nothing else. However, you need to keep in mind that your credit score comprises all owed balances regardless of whether it is a credit card debt or not.

Checking your credit report is one of the best ways to ensure that you are thinking of all those non-card balances that are affecting your score.

If you owe a no credit check loan Quebec lender some amount, make sure that you pay it on time to avoid ruining your score. You should also keep an eye on all your bills to ensure nothing is getting out of hand.

Check for Errors on Your Credit Report

Every citizen is entitled to one free credit report from any of the credit bureaus every year. Make sure you collect yours and scrutinize it for any errors or fraudulent activities. If you notice any mistake on your report, dispute it with the credit bureau that issued it for correction.

You can also dispute errors on your report by writing to the creditor who listed the account on your report. Do not assume anything because simple errors can hurt your credit score more than you think.

Keep All Your Old Credit Card Accounts Open

Do not close your old credit card accounts unless they cost you money in annual fees. Keeping the accounts open is a smart strategy that can help you manage your credit utilization ratio. Owing the same amount of money but having relatively fewer open accounts can lower your overall credit score significantly.