Why is my credit rating dropping so fast ?
Misuse of a credit card is one of the main reasons given for the rapid decline of a credit score. The Financial Consumer Agency of Canada recommends that you keep your credit utilization below 35% of total available credit. For example, if you have a credit card with a limit of $3,000, try to keep a credit balance below $1,950.
If you manage to have a good use of your credit rating, it will help you a lot with your credit score.
Here are a few reasons that can suddenly lower your credit rating:
You make late payments after the due date.
You use your credit rate beyond the recommended limit.
You close your old credit accounts etc.
You can take several concrete actions to improve your credit rating.
To know how to increase your credit rating quickly, you have to be patient but also discipline, your credit rating will not go up on its own by keeping your consumption rate and bill management for example. You have to adhere to certain rules, put in place tricks also allowing you to better manage your expenses too. Here are a few :
Consolidate your credit cards to improve your credit rating
Use only one or two major credit cards and choose carefully with our online credit card comparison tool .
Stop using other credit cards. The idea is to concentrate your expenses to be able to better manage them but also to reach the ceiling of your credit cards. Do regular checkups and install apps that allow you to access your bank accounts quickly. Set up an alert system.
Set up automatic payments to boost your credit rating
If possible, set up automatic payments for your various bills. Unpaid invoices are bad for your credit report, any late payment of more than 30 days will be indicated in your credit report and will therefore leave traces that could lower your credit rating.
It is possible to put some for the payment of the various insurances, your maturities of loans, rent, telephone bill etc.
Increase your credit limit
In order to avoid exceeding its limits, increase your limits and do not use all the credit available on your credit card, the idea is to be discreet so do not use all your credit, but only a very within reason. The best is to be around 30 to 35% of the allowed credit limit .
Keep a credit history
The longer your credit history goes, the better because the older your credit history, the more it will work in your favor. For example, keep your very first credit card account even if you no longer use it (provided there are no annual account management fees, for example).
Check your credit errors
Errors in credit files do exist, do not hesitate to come forward in the event of an error in your credit file because it can harm you unnecessarily.
Sign up for a credit enhancement assistance program
Institutions like Koho offer you credit enhancement assistance programs. Concretely, the financial institution is responsible for you to watch over the grain, to put money aside and transmits these good signals to the evaluation agencies so that they revise your credit score upwards. It’s a good way to quickly boost your credit rating.
Allow a few months at least to obtain the first results following your first actions taken to increase your credit rating. Within a year, you can see a marked improvement in your credit score. The more actions you take at the same time, the greater the impact will be.
Do you need a personal loan, don’t have an excellent credit rating and don’t have time to wait to increase it? Shop the best personal loans based on your credit score: