6 Easy Ways to Improve Your Credit Score

6 ways to improve your Credit Score

Want to improve your credit score? Here are 6 tips that will help any credit score improve. Having a good credit score is very important when applying for a mortgage. A good credit score will make it easy to get great rates, 100% financing, a great selection of lenders wanting to do business with you.

1) Pay your bills on time.

This one is obvious but propably the most important factor when calculating your credit score. One big problem of being late is that it reflects on your credit bureau for at least 7 years. The longer you pay your bills on time, the better your score. If you have collections like parking tickets, if you pay it off, it will stay on your record for 7 years. Do yourself a long term favor and don’t let a bill get to the collection stage if you can help it.

2)Keep revolving credit balances low.

If you use credit cards or other types of revolving credit, either pay it off at the end of the month or try to keep the balances lower than 70% of the approved limit. This is what the credit bureau calls credit utilization. Having a low credit utilization will help your credit score. High balances will negatively impact your credit score. Don’t close unused credit cards thinking it will improve your credit score.

3)Limit your credit.

If you have a short credit history, do not open a number of new accounts in a short period of time. Opening a number of new accounts will lower your average account age, which will have a larger effect on your score if you don’t have a lot of additional credit information. Having many credit enquiries within a short period of time can make you look risky to lenders.

4)Be focused when you go for credit.

Do your credit shopping for a given loan within a focused period of time. The formulas that are used to calculate your credit score can actually distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.

5)Manage your credit responsibly.

Apply for new credit only when you need it. Avoid the temptation to open the junk mail that comes in saying you’re pre-approved for a new credit card. We you recieve those offers burn them. Assuming you make your payments in a timely fashion, having credit cards and installment loans will raise your credit score. Closing a credit account does not make it go away and will still show up on your credit report, and may be considered by the score.

6) Get credit

Someone who has no credit is seen as a greater risk than a person who has credit and manages that credit responsibly. If you have no credit it can make it challenging to get a mortgage or a loan. If you're having trouble getting approved for credit consider a fully secured credit card

Find out how the credit bureau calculates your credit score at MyMortgageBC.com