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General Joel Scott 17 Jan

Life Happens.  I get it.

You get blindsided with some major unforeseen expense, or catastrophic life event that affects your income or ability to pay your bills.  When life happens, your credit score can pay a hefty price. And that can result in costing you thousands in unnecessary interest costs. (for more on this – click here)

Sometimes it’s not a life event, it’s just that you’ve gotten a little excited about buying stuff.  A little old-fashioned over-indulgence and you’ve ended up with some credit issues.

Regardless, if you’ve found yourself with damaged or bruised credit, there are ways to get your score back up relatively quickly. Here’s 7 things you can do immediately to repair your credit score and improve your chances to dig out of any credit hole.

  1. Correct errors on your credit report.

This one is easy. You can secure a free copy of your credit report from either of the agencies in Canada that track your credit. Review the report and make sure there are no errors or unknown issues like a fraud in your name.  Identity theft leaves you holding the bag on your credit report (and sometimes the payments).  If you do find an error or fraudulent record on your report, you can call the agency and follow their protocol for having it removed. This improves your score.

Equifax             1-800-465-7166

Trans Union    1-800-663-9980

  1. Increase your credit limit.

Sounds nuts right?  I’m having credit issues, so I should increase my credit limits?  Although it’s counter intuitive to managing your credit, increasing your limits improves your utilization. For example, if you have a $1000 limit on a credit card, and your balance is $600, your utilization is 60%, which could cause your score to drop. If you ask for an increase to $1400, your utilization changes to 42% which could help your score go up. Reminder that preferred utilization is 40% or less to keep healthy credit.

  1. Pay your bills on time – every time. (if not contact lender)

This one is critical and easy to execute. When your monthly bills come in, pay the minimum payment no matter what. This is a minimum. If you can pay more than minimum payment, great. Otherwise don’t miss a payment ever.  This keeps the score moving up.  If you can’t make a payment for any reason, call the creditor to let them know. They can put a note on your file to help, or make arrangements to adjust the payment with you.

  1. Set up automatic payments

This one is best especially if you have regular steady income.  If you automate your payments on the same day monthly, this ensures you never miss a payment and helps you budget more efficiently. Automating payments of all kinds is beneficial for this reason. The less you have to keep track of the better!

  1. Use your credit more. (Responsibly)

Again, this is something that may seem counter-intuitive but using credit regularly and paying it off on time is an excellent way to increase your score fast. An easy way to execute this is to use your credit for small purchases, on a regular basis, and pay it off right away.  For example, put a tank of gas on your credit card, and pay it off right away.  This shows responsibility with credit and helps your score increase.

  1. Keep a low credit card balance and pay monthly.

Ya easier said than done, but if you have a card with a low balance, pay it off and keep it paid off as you go. A good tie in with number 5 above.

  1. Monitor and request a copy of your credit report/score.

Energy flows where your attention goes. You may have heard this before.  It’s true of your credit report. This is good practice to get into at least twice a year. This allows you to be aware of your credit and how you’re using credit. It also allows you to be aware of fraud if you get targeted. If you’re focused on and aware of your credit score and credit health, you’re less likely to behave in a way that damages it.

If you have questions or concerns about your credit and your ability to secure financing, please contact me at any time.

Yours in success!

Joel Scott