How Do I Build Good Credit?
2013-01-04 | 11:49:47
Tips on how to build good credit:
Whether you want to maintain good credit or need help repairing damaged credit, it does takes time. Check out these tips:
• Review your free credit report every year. You can request a free report here: http://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02197.html
• Keep balances below 50% of your credit limits. High balances can mean high risk.
• Dispute any errors or out-of-date information. Doing so can boost your score and clear up any misinformation.
• Pay your bills on time. The largest part of your credit score is based on your payment history.
• Keep your accounts open longer. The length of credit history is another important factor. Don't close your older accounts if possible. Add new accounts if it makes sense, but don't automatically close your older ones when you do. Doing so can cause you to lose points for having new inquiries, adding new credit, and having a shorter history.
• Many inquiries on your account over a short time period can lower your score. Only add more credit if it makes sense.
• Use more than one type of credit. Mortgage lenders, for example, like to see history of at least two trade lines. Open these accounts to show that you can manage credit cards and loans just MAKE SURE you are responsible with them.
• Accurate negative information stays on your credit report for 7-10 years. However; every time you add positive information, it helps lessen the negative information. Most credit scores rely heavily on the last two years of history, not all seven. For example, a teenager who maxed out their credit card and defaulted on payments will not be paying for this mistake forever.
• Co-signing for anyone can be risky. If they do not make their payments, you might not know about it for months. You will not only be on the hook for their debt, but your credit score will suffer as well. Make sure you are comfortable and know the person you are co-signing for well.