Credit is something we all need if we want to own a home, buy a car, get a credit card. It is not hard to screw it up as often it is given to us at a young age with no real instructions on how to manage it and what a privileged credit is. We learned quick how to trash it and we have been told to fix it but has anyone told you where you are? Where you need to get? How to get there? Did anyone give you the information?? We have some great information on credit repair in Canada.
I know they didn’t tell us we had to learn the harder way so I am going to share what we learned over the last few years. We went from not being able to get credit for a cell phone to owning a home and have about 3 years left of mortgage payments, we both have vehicles and Roy has a 4 wheeler & we do own credit credits. We have cell phones on contracts, our oil comes on credit and we no longer get to ask to pay deposits on things. Is our credit perfect? Nope not yet, it takes time however we are hoping by the end of this year both our scores will jump to Excellent.
Credit scores vary from 300 – 900. The higher the better, when places such as the bank, the credit card company “runs” your credit those are “hard” hits to your credit score and these are the things that lower your credit score.
What is a good score?
800-900 Excellent credit
720-799 Very good credit
650-719 Good (but you may not get the lowest rates)
600-649 Fair credit
300-599 Needs some work!
There are 2 credit bureaus in Canada Equifax and TransUnion. There are also 2 places you can see your credit score for free. You will end up with 2 different scores due to them being different places and weighing your information a bit different. I had an approx 30 point different with my Credit Karma being higher. Never pay for your credit score or report; use these free features.
You can see your credit score for free at Credit Karma which uses Transunion.
You can see your credit score for free at Borrowell which uses Equifax and does not lower your credit score in any way.
You can improve your credit score in two easy steps
- Paying your bills on time accounts for 35% of your credit score.
- Watch your credit utilization. If you have a combined credit limit say of $10000 keep it under $3000 , If you have $5000, you would need ot keep the balance under $1500, $2500 in credit would be keeping the balances under $750.
How is your credit score made up?
- Payment History 35%
- Credit Utilization 30%
- Credit History 15%
- Credit Mix 10%
- Credit Inquires 10%
Things that can hurt your credit:
Too many credit accounts open
Too few credit accounts open
High credit card balances
High balances on loans
Too many credit applications.
Most companies report to the credit bureau monthly, so set your goals on a monthly basis. If you have items on your credit report that is in collections. Call the collections agencies and negotiate a “settlement”. The collection agency earns only a percentage of what they collect. Most agencies will accept between 50-70% of the actual debt, other times they will remove any interest charges, late fees, etc and when you are talking a credit card debit; that amount can be substantial.
Are you looking to fix your credit? Share in the comments what you are going to do this year to fix yours??