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Tips To Improve Your Credit Score In Canada

December 21, 2018

Tips To Improve Your Credit Score In Canada

Wondering how to improve your credit score so that you can get an auto loan approval on affordable terms? First of all, it is important to know that you can still get approved for an auto loan with bad or poor credit. A frequently asked question a lot of consumers have is, “how can I improve my credit score?”

Convincing lenders that you are a low-risk customer is important. If you want to improve your credit score in a short period of time and strengthen your chances of getting a quick approval, here is what you need to do:

Rectify errors in your credit report

You can get a copy of your credit report from the largest credit bureaus in Canada: TransUnion and Equifax. Once you have the report in your hand, make sure all the information is correct and there are no mistakes. If there are discrepancies, immediately contact the credit bureau and rectify them. For instance, you can have someone else’s debts information mistakenly included on your report, or your report may show incorrect payment history or debts that have been paid in full.

Increase your credit limit

Many people think that increasing their credit limit is all about having the opportunity to spend more than what you can afford. However, if you manage your credit considerately, increasing your credit limit can provide some benefits; it will allow you to increase your score and lower your credit utilization provided you make payments on time and keep your utilization low.

Make timely payments

There are numerous benefits of making timely payments. When it comes down to reviving your credit score, start being punctual and pay your bills on time. Your credit score depends largely on your payment history. When you start making late payments on your credit card, your score will witness a sharp decline.

Use your credit often

This technique may seem a little counterintuitive, but using your credit more often is one the most effective techniques to repair your credit score. Your credit history represents your ability to use credit and pay it back on time and it reflects whether or not you are able to manage your finances. Therefore, it is probably a good idea to keep using your credit as long as you are in a position to pay it back.

Consider using prepaid credit cards

Obtaining a prepaid credit card is another way to repair your credit history. You can use a prepaid credit account just like a regular credit card but you have to deposit funds upfront. If you are having a tough time getting approved for an auto loan, a prepaid card will help you build a credit history as well as boost your poor credit score.

Related: Auto Loans In Canada: Does your Credit Score Matter?

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