You have been trying to take out a loan for a while now, however have found that this has not been as easy a process as you would have expected – the reason being . .. your credit score is rather low.
To add further fuel to the fire, you need to get a loan sooner rather than later. As a result, the next question you may be asking is how quickly can I improve my credit score??
Well, perhaps it is best to take a lot at how your credit score became lower in the first place – and then go from there. Your credit report of course is where you can review the most recent credit transactions you have made as well as those that have made up your credit history over time. This is where you can find out where you’ve in fact gone wrong.
The good news is you can access your credit report from either one of the Canadian credit bureaus, Equifax or TransUnion whenever you want – without this negatively affecting your credit score. While there may be a fee, especially if you want to order a copy of your credit report and your credit score, this is still a straightforward process – and depending on which method you use to obtain it you can receive it within a few short weeks or less.
While it may take some time to officially receive your credit report, it will be very insightful when it comes to knowing how you can most effectively improve your credit score. In the future you should look to check your credit report at least once a year.
In the meantime, there are other ways you can work towards raising that score.
The next step is to learn what exactly affects your credit score – as well as what can be the most potentially damaging to it. In order to better understand what makes up your credit score, you can keep in mind the following details and ask yourself some of the following questions as you do.
Do you have an extensive credit history or a short one? A longer history typically helps to account for a better credit score.
Do you make regular, on time payments on your loans – or late or missed payments? Since payment history accounts for a significant amount of your credit score – if you have a track record of making inconsistent payments, this likely also has lead to a reduced score.
What percentage of your total credit balance have you used? If you are over 30% of our available credit, this can also lead to a bad score. Additionally, if you have used more of than 75% of your credit card limit, this can also lead to a lower score.
Have you ever filed for bankruptcy or had loans that have gone to collections agencies? If this is the case, this will also be reflected on your credit report and your overall score will also be lower than you would like.
Overall, any one of these credit transition areas can lead to a poor score. If you have been involved in more than one of these – then of course this will impact it even more negatively. The good news however, many of them you can work towards changing for the better – improving your score in the process.
It is important to also mention that while some negative credit information can remain on your report for up to 6 or 7 years – there are ways to improve your score as quickly as possible. While it is true that your credit score will not experience a complete turn around over night, with consistently good credit history over time you can work towards raising your rating.
If for example, you are applying for a new credit card, however are being denied this because of missed credit payments – if you can show that you can make these payments on time over the course of about 4 or 5 months – sometimes this is enough to improve your score somewhat and enable you to get that new credit source you’ve been looking for. Of course, each lender will operate under slightly different criteria – so they will tell you how long before you can reapply for that credit source.
So again, getting into the habit of paying your bills on time and lowering you debts to a reasonable level will go a long way to rebuilding your credit score.
Especially in the case of wanting to obtain that additional credit you need, then taking steps today can help you get your credit moving in that upward direction – and the sooner the better.