How to Build Your Credit Score Back Up
Having a healthy credit score can help you have better financial freedom and opportunities. Maybe you made some financial mistakes while at school, or perhaps you hit upon hard times and had to rely on credit cards to get out of a tight spot. No matter why your credit is less than desirable, there are things you can do to make it better. Thanks to our experience, Arise Mortgage has seen it all. We take a common-sense approach to what are uncommon situations and work with our clients, even those with poor credit, to help them get a mortgage. If you are trying to improve your credit score to boost your chances of getting a mortgage, here are some of our top tips.
Pay Your Bills On Time
If you have paid bills late in the past, then this has had a huge and negative impact on your credit score. The best thing possible for you to do is to start paying all your bills on time and keep up with them. Over time your credit score will get better, as your credit score only shows up to the last seven years. Every month of bills paid on time helps improve your score and brings you to a better financial future. If you have a hard time remembering to pay your bills or you struggle with the task then ask for help or switch to automatic payments or withdrawals. You can always then check to make sure that the electronic payment was accurate and dispute it if it was not.
Keep Your Credit Card Balance Comparatively Low
You will want to keep your credit card balance to 25% of your available limit or below as a general rule. If you have a maximum credit of $10,000 then not exceeding $2,500 will help keep your credit score high.
Make Reasonable Payments On Your Debt
If you are carrying any credit card debt, then you want to make reasonable payments on it. Lets say you have $3,000 in credit card debt and an interest rate of 19% (average for Canada). You need to know that interest rates on credit cards are charged daily, not monthly or yearly. If your rate is 19%, then your daily interest rate is 0.052%. So if you have $3,000 in debt then the first day you get $1.56. That seems quite low. The second day though, you are now paying interest on $3,001.56 which leads to higher interest payments each day over time. By making more substantial payments on your credit card, you will save significant money in the long run.
Check Your Credit Report for Errors
Thanks to Federal law, you can get a free copy of your credit report once a year. You just need to contact one of the three major credit companies. So, once a year, go over your statement and make sure that all the information is factual and yours. There can sometimes be errors that are costing you. If you identify any, you can then apply for a correction, and your credit score can receive a boost.
Rise with Arise Mortgage
At Arise Mortgage we help people, who have been turned down by the big banks, find lenders who are more relaxed in their lending guidelines. This will enable our customers to get into the housing market and work towards their financial future. We also provide debt consolidation to help people lower their monthly payments and manage their finances better. If you are looking for an experienced mortgage broker that offers better mortgage rates in Vancouver, then come to see us today!
If you want to learn more about credit scores, check out my Youtube video here!