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What Can Hurt and Help My Credit Score?

Glancing through your recent credit report, you’re a little surprised to see that your credit score is not as high as you expected. In fact, it’s actually a little low. You’re likely a little shocked, and wondering how did this happen, and how can I fix it?

As discussed in our podcast episode, many Canadians are not sure why their credit score is low and what steps they can take to help rebuild and improve their personal credit score. Here’s what you should know when it comes to your score:

Credit score defined

Before you can fix your credit score, you should understand what your credit score actually is. Essentially, it’s a three-digit rating that is used by organizations, businesses and, lenders in order to determine whether you are a trustworthy and responsible borrower.

You may be surprised to learn that your credit score might not only affect your ability to secure a mortgage or a car loan, it may also be used by landlords and prospective employers to determine whether you are a good candidate for the position or the apartment.

Factors that hurt your score

As discussed in our podcast, there are many factors used to calculate an individual’s score that can also negatively affect it, such as missing bill payments, making multiple late payments, owing debts that go to collections, carrying a credit card balance that is close to your limit and filing a consumer proposal or filing for bankruptcy.

How to repair your credit score

If your credit score rating is less than stellar, there are steps you can take to repair it. As mentioned in our podcast, reviewing your credit score first is a good start. From there, it’s time to focus on fixing past mistakes and establishing new, healthier credit behaviours by paying bills on time, avoiding late payments and other actions that demonstrate the responsible use of credit as this will help to boost your current score. For more tips and tricks on rebuilding your credit score, check out our full podcast.

Were you surprised by any of the factors that could potentially hurt your credit score?  Share your thoughts and join the conversation on social media using hashtags #DebtSolutions #CreditScore.

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