Currently the Canadians with the lowest Credit Scores are 25 years and younger, where as the group of Canadians with the highest scores are 65 and older. Struggling to repair your credit? The Mortgage Associate at TMG Saskatoon Scott Trainor has some great ways to repair and build your credit:
- Pay your bills on time and in full – Even if you have had just one late or missed payment it may be recorded on your credit bureau. It is very important to pay your bills on time and in full if you can. Not all monthly bills will affect your credit score. Monthly payments such as utilities or rent will not show up on your credit BUT if they are sent to a debt collector they will. Credit cards, line of credits, mortgages, vehicle loans, and cell phone payments will all show up on your credit bureau.
- Do NOT go over your credit limit – being above your credit limit on credit cards or loans will drastically decrease your credit score. Also, if you aren’t over your limit but you are close to it, that can lower your credit score as well. Prospective lenders want to know that you can pay off your debt, if your credit score is low or you have debts that are over their limits they may not take a chance on lending to you.
- Try to pay off debts as QUICKLY as possible – If you have money saved up, consider putting large sums on your debt to try to pay it off quickly. If this is not an option for you, make sure you are budgeting to put money into debt repayment. The quicker you pay debt off, the better your credit bureau will look.
- Keep credit checks to a minimum - it is true that each time someone checks your credit score, it drops a little. With someone like a mortgage broker, your credit is checked once and then it can be sent to multiple lenders. If you try to go to multiple banks yourself for mortgage approval, each bank will want to check your credit. This can make a negative dent in your credit score. Be wise when it comes to how often your credit is being pulled.
- Credit History – Part of the reason why it is a younger generation who have lower credit scores is because they haven’t had credit for as long. It is important to build positive credit history. A lender is more likely to lend to you if you have some credit history (paying off a credit card, car loan, etc).
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