Tips to Improve Your Credit Rating

We are constantly answering many (and very relevant) questions about famous credit scores. First, be aware that the credit reporting agencies (or credit bureaus) are responsible for compiling the data and issuing the credit scores. The latter are in fact an index of probability that a person pays late or that he is too indebted. It measures your credit behavior using a scale of 1 to 9 – 1 indicating that you pay your bills within 30 days and 9 that you have stopped paying your bills or have submitted a rebate proposal. debt. This figure is preceded by a letter: I means that you have been granted installment credit; O, that you have open credit; and R (the most common), that you have obtained revolving credit.

Each credit rating is an indicator of the likelihood of risk for lenders and of a person’s ability to manage their payments and debt. In other words, it allows financial institutions to assess your ability to repay a loan.

 

Behaviors That Affect Your Credit Score

Behaviors That Affect Your Credit Score

Here is a summary of the factors that negatively impact your credit rating.

  • Don’t pay on time. Delays negatively affect the credit rating.
  • Exceed your credit limit. Ideally, you should not use more than 70% of your credit limit. On the other hand, using it from 25% to 70% has a neutral effect, and using it at less than 25% has a positive effect on the rating (if we repay on time, of course!).
  • Have more than two credit cards if you are an individual and more than four if you are self-employed (Visa, MasterCard, American Express, etc.). Prefer major cards to those of department stores. Remember that the rating measures your behavior, so the duration of the credit is also important. So always keep cards with a longer date, as this shows stability. Also, do not increase your possible debt ratio too much, as this could also harm you.
  • Have more than three credit checks per year. For example, when applying for a mortgage, insurance, car loan, cell phone plan, a credit check is often done.

 

Shopping for a mortgage yourself can hurt your credit rating!

mortgage credit rating!

So, if you’ve followed the reasoning thus far, you understand that, yes, shopping for a mortgage yourself, going from one credit union to another, can harm your credit rating. . However, many queries to your credit report in a short period of time (less than two weeks) will have no impact on your credit rating, provided they are coded the same way.

A mortgage broker has access to all the parameters of the banks and can find the mortgage that suits you without creating multiple interrogation problems. In addition, the mortgage broker knows the processes of financial institutions better than anyone, because they do not all have the same criteria. So being denied a mortgage in one place doesn’t necessarily mean it’s the end of your dream!

Talk to your broker today.

To remember

  • The credit score is an index to assess the probability that a person will be late in paying.
  • There are many ways to positively influence your credit rating, including paying your accounts on time and limiting the number of inquiries at your credit bureau.
  • Shopping for a mortgage yourself could cause many questions to your credit bureau, which could affect your credit rating.
  • The mortgage broker avoids making several questions and can help you in the process of accepting your file, because he knows the criteria of different financial institutions.