You may have financial mistakes in the past that may affect your credit history and credit rating. Poor or low credit score may hamper your chances of qualifying for a loan and getting low-interest rates. Maintaining and rebuilding your credit requires effort and perseverance. A low credit score may not happen overnight.
Sometimes most of us do not know that we are harming our credit score by using more than 60% of your credit card and made a late payment or did not pay even the minimum balance, this may harm your credit score.
There are several ways to harm the credit score that you may not aware of. On the other hand, there are also several ways to rescue and protect your credit score. Continue reading if you want to know different steps in fixing bad credit.
Check your credit report.
There are two credit Bureaus in Canada Equifax and Transunion. Reviewing your credit card twice a year for error may help you rebuild your credit in Canada. by reviewing your credit history, you may distinguish which area you need to improve. late or missed payments, debt utilization ratio, bankruptcy are the most common causes of having bad credit. Sometimes errors on your credit report can affect your credit score. By checking your credit history may help you improve your credit report. You are entitled to one credit report from each credit bureau.
In addition to that, having your issue sorted may help you to a better position to take into action. When you discover accuracies or identity theft, make sure to call your creditor’s attention by calling them or sending them an email. This is how to file a dispute for any inaccuracies.
Pay Off your outstanding balance.
The way you handle your credits will affect your credit score. Your payment history plays a major role in keeping your credit score in shape. 35% of your credit score comes with your payment history. When you are paying your bills on time, You may build credit with a good standing.
If you are behind your payment schedule or not making your payments on time, you are putting yourself into a bad situation where you may get difficult to get up. So when you are in a financial situation where you cannot afford to make a one-time payment to make your delinquent payments up to date, call your creditor and explain your financial situation.
Some creditors can help you make an arrangement that may work with your budget and sometimes waive the penalties for late payments.
If you have a multiple credit card debt, you may want to consider a balance transfer. Credit card balances come with high-interest rates usually 19.99% or higher. continuously missing your payments may put you on a financial situation that you will pay more than what you owe.
A balance transfer is a process of transferring your high debts credit card to a new credit card with lower interest rates. Getting a new credit card to rebuild your credit will help you pay off your debt faster. Most credit cards come with an introductory period like 3-6 months to a year without interest. It means that you may take advantage of paying off your debt because most of your payment will go towards your principal balance instead of interest balances.
Make a minimum payment every month.
If you cannot make a payment on time, make sure to make a monthly payment. You can make a minimum monthly payment. A missed utility payment, cell phone bill can get reported to the credit bureaus, so you must start establishing a reliable payment history by paying at least the minimum payment.
In case you forget paying on time, set up a reminder or you might want to consider automatic payments. Late payments and missed payments may harm you and your credit score.
building a credit report is not easy. It requires effort and time to go back on track. But if you consistently follow the steps to build your credit score, you will be back on track in no time. Having poor credit is not easy especially if you are planning to make a big purchase. Protect your credit score by paying your monthly dues on time so that it will not make a big impact on your credit score.