A good credit score opens a lot of opportunities such as getting a loan. But if your credit score is going downhill, then it will be hard to get one. A credit score is a number that reflects the likelihood of you paying the credit back and is based on a level of analysis of your credit files to represent your creditworthiness. So, if you’ve got poor credit, then it is considered a risk for lenders. They do not usually accept applicants under this condition. Lenders will tend to question your capability to pay which will be difficult for you to secure a loan.
However, don’t be discouraged. There are multiple ways to improve your credit score. How long? It depends on the kind of marks on your report. There is no quick and easy way to “repair” or “fix” your credit. That is why a Credit Repairing Company in Canada exists to help you. The credit repair companies can correct misinformation or errors on your report which are holding back your credit score. They will work on your behalf in dealing with lenders and credit bureaus to ensure that all mistakes on your credit will be corrected.
As stated by TransUnion, one of Canada’s largest credit bureaus, Canada has an average credit score of 650. Nonetheless, roughly 20% of Canadians have a credit score that falls below 600. Any person with a credit score of less than 600 shall be considered subprime or non-prime.
Subprime mortgage loan approval rates may have marginally higher interest rates, as this category of borrower is perceived to be a greater risk of default because of a less-than-perfect credit report.
Although Canadians with more than a 650 credit score (prime borrowers) attract more lenders and typically get lower interest rates, accepting high loan rates with lower credit scores is not impossible. If you’re subprime, then you don’t need to be one always. Your credit score starts improving when you understand what went wrong financially.
How long does it take to repair my credit score?
The time it takes for a credit to be repaired has no standard frame. But it depends on the number of factors affecting the credit report. Here are a few:
- Negative information
- Missed payments
- High credit utilization
- Derogatory marks
- Mixed accounts
- Debt accumulation
- Credit usage
- Credit mix
With these factors, the length of time to repair credit will depend on the severity of the negative history dragging down your credit score. It is significant to know how long the process will take so you can effectively plan ahead. It may take 2 to 7 years or more. On the other hand, false claims on your credit report can be disputed by credit bureaus as long as all necessary documents and statements are provided.
For example, your credit report stated that you did not purchase something when in fact, you did. To correct the error, you need to draft a dispute letter and gather all evidence. Once submitted, it will take 30-days for the bureaus to verify and respond to the claim. Sometimes, disputes are resolved typically around three to six months.
Any negative factor seen in your credit report will greatly affect your credit score. Thus, your score will limit you from enjoying the benefits of having outstanding scores. But you shouldn’t worry; there are ways to rebuild your credit and improve your credit score.
How to Improve Poor Credit Score?
The first step to improve your credit score is to develop more responsible habits. Although bad credit history won’t disappear overnight, still it is best to be more disciplined with your credit. Here are five effective ways:
Pay Your Bills on Time
Late payments can have a significant negative impact on your credit score. Each time you miss a payment, your score keeps going down. So, it is best to pay your bills on time. Overdue payment will stay on your credit report. Once you apply for a loan, the lenders will do their background check on you. If the lenders know that you were not responsible enough to pay your bills on time, then lenders will not hesitate to deny your loan application.
An error in your report is one of the biggest factors of your poor credit. Errors like misspellings, inaccurate information, duplicate accounts, and others must be corrected. Therefore, dispute all mistakes found in your credit report to increase your credit score.
Reduce the Amount You Owe
The more debts you have, the more it can harm your credit score. The amount you owe determines 30% of your credit score. So, it is better to reduce your debt and pay it on time.
Don’t Close Unused Credit Cards
Closing an account may increase your credit utilization rate. You can keep your unused credit cards open as long as they are not costing you to pay for annual fees. An account with a long history and solid track record in paying debts and bills responsibly is the type of borrower that lenders and creditors want.
Regularly Review Your Credit Report
Reviewing your credit report regularly will help you keep on track of your record. You will immediately know whether your report has an error such as misinformation and duplicate accounts. It is best to contact a credit repair company to help fix your credit report.
It takes time to improve your credit score. If you are looking for the kind of service that will help fix your credit and increase your score, then look for a Credit repair GTA – Canada. One of the most reliable Canadian credit repair companies in the Credit Repair Now. They’ve got a team of experts who are willing to help you with your credit concerns. So, what you only need to do is to set an appointment with them through contacting their email [email protected] or call them at +1 647-373-9651. Credit Repair Now will gladly serve you.