It’s a good idea to get in the habit of checking your credit every year to make sure that it is accurate. To get a copy of your credit report and score contact either Equifax or TransUnion. These are the only 2 credit bureaus in Canada.
Your credit report contains the following information:
- Personal identification, often includes employment information
- Record of which organizations have recently asked for your credit report
- Your payment history for accounts reported to the Credit Bureaus
- Any information on Public Record (collections, judgments, bankruptcies)
The Financial Consumer Agency of Canada has information on understanding your credit report and score
If you think that your credit score is not as high as it should be, review your report for accuracy. If the report is correct, check which factors are negatively affecting your score. Then work on improving it. The only way to get a better credit score is to use good credit practices.
It is important to understand that there are no quick fixes for poor credit scores, but there are some things you can do to improve it:
- Pay your bills on time
Even being one day late can hurt your score. If you tend to forget, set up auto payments for your bills for the minimum amount…you can always pay more later.
- Try to pay your debts as quick as possible
- Never go over your credit limit
Keep your balance well below the limit (below 75%, but 50% or less is best) since the interest could push you over the limit. The higher your balance, the more impact it has on your credit score. Even being a few dollars over with affect your credit score each month.
- Do not apply for store credit cards
They have interest rates as high as 29 percent and the Credit Bureaus view them negatively.
- Don’t apply for too much credit at once
Too many potential lenders asking about your credit in a short period of time can have a negative effect on your score. Credit Bureau’s view this as a sign of financial difficulties, but you can check your own score without any negative impact.
- Be careful when closing accounts
Even if you are in dispute with a lender make your payments. Any missed payments will show up on your credit report and are difficult to fix. Once you close the account get a written statement saying it is closed with a zero balance.
- Get a credit card if you do not have one
You may have a low score if you do not have a record of owing money and paying it back. You can build a credit history using a credit card even without carrying a balance.