Want a loan or want to get a new credit card? The very first thing that the lender or the credit card company will check is your credit score. This number is then used to check if the applicant is creditworthy, and only after that, they will approve of the credit.
A credit score is a three-digit number that given by the credit bureaus. The lenders, credit card companies, and insurance companies ask for the credit score from the bureaus. It should be noted that the lowest score is 300 and the highest is 900.
Having the credit score in the good or excellent zone means you can easily get loans and credits. Otherwise, it can be difficult, and you may end up paying higher rates.
Some ways you can improve the credit score before you contact a Montreal loan company are:
1. Pay the bills
One of the first things you need to keep in check is the payment of the bills. Make sure that you pay the credit card bills and even utility bills on time. Bills not paid is a bad mark in the credit report. Automate the bill payments or pay them before the due date.
2. Credit report check
Make sure to check the credit report regularly. If there is any type of negative reporting in the report, it can cause the score to go down. Check if the personal details, payment details, debt details, and the like are reported correctly.
3. Keep the credit card alive
Many times, people tend to cancel their older credit cards. This can hurt the credit score as it can increase the credit utilization ratio. Instead, keep those credit cards active and use them from time to time. The longer the credit history, the better the credit score.
4. Lower credit balance
A higher credit balance is equivalent to a lower credit score. Maxing out the credit card can be disastrous for the credit score. The credit utilization ratio (relation between the credit limit and credit balance) should be 30% or lower. Make sure to pay the credit balances on time and more often and try to increase the credit limit form from time to time.
5. Intelligent credit shopping
Whether it is a credit card or a mortgage loan or a car loan, these are all credit lines. Try to keep the credit portfolio varied, and try to handle them all well. If you pay the debts on time and handle every single credit efficiently, it will show up in good light in the report.
When applying for any credit to any contact a Montreal loan company, try to do so in 14 days’ time span. Every single application means a hard credit inquiry, and that means lowering the score. If all the application is done in limited time, all the inquiries will come into one request, and the score will not get affected.
Maintaining a good credit score is very important, and that is why you should always keep yourself vigilant. Pay the debts, lower the credit balance, consolidate the debt, and keep track of what is happening in the credit report.