High Credit Score

Tips on How to Build Credit

When looking to build your credit, it is often advisable to request a copy of your credit report as an effective first step. Once you have a good understanding of your financial situation and how potential lenders would view you, it will help you understand how much you need to improve upon it. If you need some assistance, licensed insolvency trustees like A Miller & Associates are available in the Toronto are Scarborough areas. Seeing the credit report for yourself may also lead you to notice some errors and try to have them corrected.


You may even choose to write a letter to creditors about previously unpaid debt and negotiate having it removed from your credit history if you pay off the money now; this could certainly help your score, if they oblige you. TransUnion and Equifax are the Canadian credit reporting companies from whom your potential lenders can uncover your credit history. A high three-digit score indicates a low level of risk for them to grant you a loan, whereas a low score would indicate high risk.


Another great method for helping you build your credit is obtaining a credit card and handling it responsibly. This counts for secured credit cards and even those provided by department stores. Part of the responsibility involved means not overspending with your credit cards simply because you have them. Experts recommend using less than one-third of your allotted credit each month for the best credit score and, if you are finding this too difficult, to raise your limit. However, the same 30% rule applies no matter what your credit card is willing to grant you.


Having a savings account at a bank is another good tactic for a multitude of reasons. Firstly, it gives you somewhere to put your money and help motivate you to save because the amount is automatically calculated and you can see when it fluctuates with your credits and deposits. A high interest savings account or Tax-Free Savings Account can even help you acquire interest on money that would otherwise be sitting stagnant. Any savings account, however, can effectively demonstrate to potential lenders that you have the ability to save and that you are trustworthy.


Although you need to have enough money with which to invest, this method will likely also help communicate that you are responsible and serious when it comes to your money. Another way to be approved for credit and start building it is by seeking out a friend or family member with solid credit to co-sign for you. Not only can this demonstrate your financial responsibility, but it should also hold you more accountable knowing that defaulting will negatively affect your co-signer, as well.


Once you can get credit and build up your related score and history, it is important to continue practicing good money habits. Small credit loans, if handled responsibly, can help you lead to larger ones like a mortgage from a reputable financial institution. Do not take for granted that it can be easy to slide back into overspending or mismanagement. Licensed insolvency trustees like A Miller & Associates in Toronto and Scarborough can offer helpful financial advice to get and keep you on a smart path for your future.

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