
Credit scores aren’t fixed in stone. Because they’re calculated based on your current credit report, they change every time your credit report changes. While this change may be very slight, it can also be much more dramatic. Here are some things some financial advisers say to do to try to improve your score:
- Review your credit report and correct any errors you find. A shocking percentage of credit reports contain errors — one study concluded that as much as a quarter of reports list wrong information that hurt an individual’s score [source: CNNMoney]. Getting rid of these negative mistakes can improve a score dramatically.
- Keep old credit accounts, even if you’re not using them. Creditors look at the debt-to-credit limit ratio and the average age of your accounts.
- Reduce your balances on credit cards to 75 percent or less of your available credit (25 percent is preferable).
- Pay your bills on time. Assuming that there are no big errors on your report, punctual payments are the most effective way to improve your score. If you look back to the page on credit score breakdown, you’ll see that payment history is the most weighty of all elements of your score. This has to do with whether you pay debts back on time and in full. This may take time to raise your score dramatically, but you’ll see slow and steady improvement.
- Don’t let anyone make an inquiry on your credit report unless you absolutely have to. In general, the more inquiries, the lower your score. However, if you are shopping for a loan, make sure multiple inquiries occur within a few weeks, so that they can count as one inquiry on your score.
- If you are planning on applying for a big loan, such as a mortgage, don’t open new credit card accounts just to increase your available credit in the hopes of raising your score. Opening new accounts will at first have a negative impact. In the long term, however, having more credit available can boost your score.
If you are looking to re-establish or improve your credit rating, we can help. At Fast Lane Credit, applying for your car loan is quick and easy. We can get you approved for you car loan in Ottawa. Click or call us today at 877-306-0116.