It’s no secret that credit score is one of the most important factors contributing to your financial position. Whether you want to purchase a house or get a personal loan, your credit score plays a great role. This happens because lenders must analyze how responsibly you use your credit card, ensuring you’re a low-risk borrower. Therefore, if you want financial opportunities in Canada, building a healthy credit score is important.
This blog discusses the ideal roadmap to building a credit score in Canada.
Avoid Late Bill Payments
One of the best tips to build a healthy credit score is to avoid late bill payments at all costs. Your payment history has a major impact on your overall credit score, and if you pay off all your bills and debts responsibly, you can boost your credit score significantly.
Charging all monthly bill payments to your credit card is an effective way to prevent late payments or missed bills. Then you can pay the balance on time, avoid interest charges, and end up with a good credit score.
Use Less Than 30% of Your Overall Credit
Another important factor that lenders take into account while checking your credit score is your overall credit utilization. This refers to the amount of credit you use monthly. Ensuring that your credit utilization is less than 30% of your entire credit limit is advisable.
You need to remember that the lower your credit utilization, the higher your credit score. Therefore, if you’re able to bring your credit utilization down to about 10%, be prepared to witness your desired credit score!
Check Your Credit Card History
Before taking different measures to improve your credit score in Canada, it’s essential to know what is impacting your credit score currently. Get a copy of your credit report, also called credit card history, to see what’s increasing or decreasing your credit score. Remember that information as you start your journey towards a healthy credit score.
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