Need to improve your credit score? The following tips will help with building a credit rating as a new credit user, as well as improving an old credit rating.
- Balance your chequebook each month, so that you don’t overdraw your chequing account.
- Make regular deposits into your savings account and try to avoid withdrawing from it. Additionally, some banks will allow you to take out personal loans that are secured by your account. This will help to establish credit.
- If you’ve never had a credit card or taken out an installment loan, you can still establish good credit references. You can do this by having a stable relationship with your bank and paying off your rent and monthly utility bills on time.
- By taking out an RRSP loan and paying it off in time every month, you can build a good credit rating, while also saving for retirement and reducing your taxable income.
- Using a secured credit card is a good way to build credit. This involves providing the credit card issuer with a deposit, which will become the credit limit to your card. Making payments on this card will build credit the same as a normal credit card.
- Department store or gasoline credit cards offer lower credit limits, so they are often easier to obtain for first time credit card holders, or people trying to re establish their credit rating. Using these cards and paying them off each month will still build a good credit rating.
- Obtain a copy of your credit report, and check for errors or omissions before applying for any credit. You can do this for free via mail.
- When trying to build or improve a good credit rating, don’t apply for too much credit at once. Too many credit inquiries sent to the credit bureau may cause lenders to deny your application.