A credit score is more than just a number and it is the decision-maker when it comes to borrowing money. Your credit score proves to the lender that you’re good with your money. The score is taken into consideration when getting a mortgage, a credit card, a car, and more.
Your credit score comes from your credit report. A credit report is determined by the “creditors” which they receive information from the institutions you owe money to.
Depending on your credit score, be it low or higher, your interest rate and time wait for loan approval also varies. The better the credit score, the lower the interest, and the shorter time you’ll have to wait to get approved.
Read Related Post: What Is Your Credit Score And Why It Matters?
Wondering how to repair your credit? Bellow, you will find a list of the top 4 tips to repair your credit.
1. Borrow fully secured money
Secured debts are those that are backed up by some sort of asset or guarantee. The most common examples are car loans, Investment loans, or mortgages. If you don’t pay, the creditor sells the “security”. A variation on this is to have someone co-sign or guarantee your debt. In this case, they will be granting credit to your co-signer, not you. If you repay the loan, your record will benefit.
2. Obtain a secured credit card
Placing a sum of money on deposit with a bank and pledging the money as security for the card does this. If you don’t make your required payments, the bank will withdraw the money from your deposit and reduce your available credit accordingly.
3. Start an RRSP
For some reason, banks view people with RRSPs differently. It demonstrates that you’re looking towards your future and creating POSITIVE NET WORTH. Even a small consistent monthly contribution can go a long way to improving your position with credit grantors. This will cause a marked improvement in your report.
4. Borrow when you don’t need to
Obtain a small leveraged investment loan. Make regular payments and over-time, it will have a marked improvement in your credit report.
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