Improving Your Credit Score Is The Key To Your New Home

What is a Credit score? Let's look at the definition of the same

.

"A credit score is just a numerical term based on a statistical evaluation of someone's credit files, it reveals how creditworthy the person is. A credit score is mostly based on credit report information taken from credit bureaus".

As we all know Credit reporting is a very sensitive issue for any Canadian citizen and that's the reason it needs to be done very carefully and accurately.

The credit scores are worked out relying on few factors such as: -

oPayment record which comprises of bankruptcies, dues, wage attachments and pending bills and this make 35% .

oAn amount to be paid is 35% which features sums payable on accounts, amount of balances to total credit limits. Carrying less than 35% of maximum credit amount available is actually incorrect as it weakens your credit score.

oTime-span of credit history is 15% which features the time since accounts opened up and the time ever since an activity was done on the account opened up.

oNew credit is 10% which includes the number recent inquires made about the credit and the number of accounts opened recently .

oTypes of credit are 10% which features different kinds of accounts such as credit cards, retail accounts, mortgage, etc...

There are certain steps which help to improve your credit score: -

oAttain a copy of your credit record. Analyze it and review it thoroughly, correct if you find any errors.

oMany people stop paying out their mortgage repayment before they stop paying out their credit cards as they really need to pay a huge amount of money. This has a negative impact on your credits score and its really bad. As well the companies will never give the credits as you hold a poor standing on account of late repayment on your mortgage.

oIf your credit history is questionable then open new credit accounts to or pay your bills on time with responsibility .

oOwning 5-6 kinds of credit cards or keep credit accounts open that you do not use as it badly influences your credit scores.

oHaving a credit card or installment loan helps to improve your credit scores but you need to have less balance and pay it off on time.

oYour account balance ought to be about 25percent of your credit limit.

oTry not to transfer your credit card balance to another lower rate cards as this may have a hit on your credit score.

Re-creating your credit card after one year of bankruptcy is tricky but a secured credit card would be encouraged for which every $1 of deposit you have $1 credit. There is no risk to the issuer and will be helpful to re-establish the credit when required to apply for a mortgage.

by: Jamie Hanson

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