Improving your credit score can be tricky at times, it’s a slow and gradual process. Unless you find a major error on your credit profile or report to dispute, it can take a long time to get your score to where you might see the cost of borrowing more agreeable with better interest rates.
The average Canadian credit score is around 650, which is just the beginning of the credit band for what is considered good. There are all kinds of ways to improve your credit score, from following the tips found here and here to applying for a loan or improving your credit mix. But many of these are often well known, and if you’re looking for some new ideas then below might be the answer.
Having a good credit score in Canada is usually between 660 to 724, but if you are hoping to get the best possible interest rate in the future you’ll need a higher score than that. The main bureaus being TransUnion and Equifax, a score can range from 300 to 900.
Different Ways of Improving Your Credit Score
Taking a loan may only help if the lender is reporting your positive payments. Since many only report to the bureaus certain negative aspects like missing payments, sometimes you might need to look for credit builder loan options like Refresh Financial to provide an extra boost.
Another option to help your credit score can be using a secured credit card like plastk to report your positive payments and good habits to credit bureaus like Equifax and Transunion. With a decent rate, small annual fee and monthly fee, it’s an easy way to add to your options for ways that might help improve your credit score. As you maintain your payments, you will help to build your credit history.
Making use of a budget can help with improving your credit score by allowing you to develop the right habits that can improve your score.
Advantages of Improving Your Credit Score
When you have good to excellent credit, the world can be a different place, financially. You might see higher credit limits, which can have a compounded effect and help improve your credit utilization ratio, which can present other opportunities.
In addition to being eligible for more credit, you may also be approved for better options when it comes to borrowing and interest rates. If you unlock lower rates, borrowing becomes more affordable, and other terms or larger amounts may become options as well.
When you qualify for better credit cards due to an improved credit score, you may find you are now eligible for interesting points and reward options that some credit cards have to offer. These can be cashback, rewards, travel points and more.
You will probably find that you can qualify for better rates on car insurance, along with other types of insurance. Anytime that you are able to save on insurance of any type, it’s a good thing in our books and welcome the discount.
You may also find that you will experience better housing options. When you apply to rent, many landlords will often run a credit check, and having good credit means more rent opportunities. Also, if you were to look at mortgages or refinancing your home, a better credit score usually helps with receiving better rates in this area as well.
If you have had issues getting utility services in the past, and possibly have required a deposit, an improved score should show some preferential treatment next time. The same would also apply with cell phones. If you’ve tried to get an account in the past and once again were being asked for a deposit, an improved credit score can help with this too.
In certain situations, it might even be to your advantage when looking for employment. Some employers (depending on the type of work) will look at the credit report of job applicants since (they claim) it provides
One Final Benefit
Having a good credit score can provide you with a financial upper hand, with one more to mention. When you are closer to having very good or excellent credit it can also provide you with more negotiating power to reap even better rates, advantages and rewards.