Improving Your Credit Score Is The Key To Your New Home

 By: Jamie S Hanson
What is a Credit score? Let's look at the definition of the same.

"A credit score is only a numerical term based on a statistical evaluation of a person's credit files, it represents the creditworthiness of that person. A credit score is primarily influenced by credit report data found 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 determined relying on number of factors for example: -

o Payment record which comprises of bankruptcies, dues, wage attachments and pending bills and this make 35% .
o An amount due is 35% that comprises amounts due on accounts, percentage of balances to total credit limits. Having lower than 35% of highest credit amount is worng since this reduces your credit score.
o Time-span of credit history is 15% that comprises the time ever since accounts opened up and even the time since an activity was done on the account opened up.
o New credit is 10% which includes the number recent inquires made about the credit and the number of accounts opened recently .
o Types of credit are 10% that comprises numerous types of accounts for example credit cards, retail accounts, mortgage, etc...

You can improve your credit score by following ways: -

o Have a copy of your credit statement. Analyze it and review it thoroughly, correct if you find any errors.
o Many folks stop paying out their mortgage repayment before they stop paying out their credit cards as they ought to pay a huge sum. This is not good and will affect the credit scores adversely. Even the agencies won't lend the credits as you hold a poor standing due to late repayment on your mortgage.
o You can open up your new credit accounts or make payments of your pending bills on time, if the present credit record is doubtful .
o Possessing 5-6 types of credit cards or keep credit accounts open that you don't use as it badly affects your credit scores.
o You can also improve by credit score by possessing some credit cards or installment loans, provided maintain low balance and pay off all the balances on time.
o Your balance must be roughly 25percent of your credit limit.
o Try 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 1 year of bankruptcy is complicated but a guaranteed credit card would be recommended for which each and every $1 of deposit you will get $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.
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