• Anne Lok

Simple Ways To Increase Your Credit Score [Part 1]



Simple Ways To Increase Your Credit Score (Part 1)

Borrowers of good credit, generally with a score of 690 or higher, can offer more options for interest rates when it comes time to shop for an uninsured mortgage. Mortgage Broker Rosanna Younan has offered a few tips below on how to improve your personal credit score:

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Main factors used to calculate scores (in order of importance)

1. Payment history:

-bills paid on time

-missed or late payment: If payment is even 1 day after due date, it’s considered late &

the longer it takes to make a payment, the great the impact

-debt not paid/sent to collection/written off

-whether bankruptcy has been declared

-withholding payments due to dispute & lender reports as late

TIPS to IMPROVE:

-always make payment on time (even if it’s only the minimum payment due)

-contact lender immediately if you are having trouble paying – they might work out

repayment arrangement that won’t affect your credit score

2. Use of available credit:

-credit utilization is 2nd most important factor

-credit score is affected by how much of available credit you actually use (not the credit

limit)

-when a large percentage of credit limit is used, lenders see you as a greater risk – even

if balance is always paid off in full by due date!

TIPS to IMPROVE:

-try to use less than 35% of total available credit (based on total available credit on all

credit cards or line of credit)

-don’t use more than 75% of available credit on any one credit card or line of credit

3. Length of credit history:

-the longer the account is open, the better for your score

-score is lower if accounts are relatively new – don’t keep switching credit card providers

(ie: promotions that you transfer balances & get new card)

TIPS to IMPROVE:

-try to keep an old account open, even if you no longer use it; especially if there is no

annual fee

-use the account occasionally to keep it active

4.Number of Inquiries

-Inquiries on your credit report affect score (signed consent is required for a credit

inquiry but sometimes it’s in the fine print & you might not realize you’ve provided

consent)

-too many inquiries may concern lenders.....may appear you are desperately seeking

credit / living beyond means

TIPS to IMPROVE:

-limit number of times you apply for credit in a short time period

-seek credit when you need it

-seek credit when you qualify: ie: If you can qualify for a line of credit – arrange for one

even though you don’t need to use it (available for emergency purposes/safety net)

-for car loans & mortgages: shop around within a 30 day period as usually these

inquiries are combined as 1.

5.Types of Credit

-score may be lower if you have only 1 type of credit

TIPS to IMPROVE

-have a mix of credit: ie: bank credit card; store credit card; auto loan or lease; line of

credit

-don’t go crazy but have a mix.

Source: http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/home-

accueil.aspx

Need mortgage advice? Contact Rosanna Younan.

Rosanna Younan

Mortgage Agent

License # M08004328

Verico Premiere Mortgage Centre Inc. #10317

Independently Owned & Operated

www.mortgageweb.ca/rosannayounan

C: 416 729 9210

Related post:

What documents do I need before getting a pre-approval?

A mortgage pre-approval is not a loan guarantee. Find out what could affect your final approval before closing.

#mortgage #torontorealestate

ANNE LOK
Real Estate Broker
287 Davenport Road Unit 1 | Toronto ON M5R 1J9

416-799-9632 | 416-504-6133 

www.mdrn.realestate

 

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