The best way to build or repair your credit score

Building or reestablishing your credit can be tricky. Bruised credit takes a while to reestablish and no credit history can be even worse. Either way, you need credit for almost everything you do from getting a credit card, to obtaining a car loan or even just renting an apartment.

If you are one of the many who have no credit there are options for you. First step would be to research credit cards that will issue credit without a credit history. There are a few Canadian credit cards that do just that! If you can’t find one, give me a call. Another option is to apply for a secured credit card. These cards require a cash deposit. Once you receive a credit card it it is extremely important to use it properly to build your credit. If you receive a limit of $500 you should not go over 50% of the limit ($250). Use it regularly for everyday items that you already have the funds to pay for and pay it off every month. You will see your credit score soar! Another credit building option is obtaining a small loan or line of credit with a co-signer. Instalment payments/revolving payments, even on small loans, are a great way to establish credit. 

If you have bruised credit as a result of missed payments it is important to chip away at any high interest credit card balances that are over 50% of the limit. As the balance drops your credit score rises. If you have collections showing on your credit…GET THEM PAID!! Once they are paid then the clock starts ticking for them to fall off your bureau. If you can pay off those credit cards…cut up them up so you aren’t tempted to use them on things you can’t afford but do not call the credit card company and close your account. Even if you aren’t using them, they are still building your credit.

Whatever your circumstance is, having a credit card helps your credit, if used properly. Just remember to keep the utilization low, pay the bill at minimum 2 days prior to the due date and don’t close them off.