How to Maintain a Good Credit Score in Canada
How to Maintain a Good Credit Score in Canada
Posted on July 22, 2022
Your credit score has a huge influence over many areas of life, from how expensive your credit cards are to whether you can rent an apartment or not. While we are mainly interested in the cost of your auto loan, It goes a lot farther to maintain good credit score long term.
That’s why we asked our London auto loans team to come up with some quick and dirty tips to help you maintain a high credit score.
Paint a picture of a responsible borrower
The one thing everyone needs to do is show that you’re good with money and are a responsible borrower. That means not borrowing too much, having some savings, having a reliable income, not maxing out credit cards and paying everyone on time.
Everything we do on this page will contribute to painting that picture.
Only apply for credit you need
Every credit application involves a hard inquiry on your credit report. Too many of those are your score will dip. Hard inquiries are also visible to lenders. Too many applications and future lenders will want to know why.
These hard inquiries can impact your score but also cause lenders to wonder whether you’re a good risk or not.
Set up automatic payments for all outgoings
Missed payments are a huge red flag to lenders. That’s why we are constantly telling you to set up automatic payments. They help you keep everyone paid on time and prevent missing payments.
Miss one payment very occasionally and you won’t be penalized for it. Miss them more often and your credit score will take a hit and lenders will look very closely at any future applications.
Don’t max out your credit cards
Credit cards are very useful for building credit scores, as long as you maintain control. Use them all the time for everyday things like gas but don’t spend what you wouldn’t normally spend.
Set up an automatic payment for the minimum amount but never depend on that minimum. Aim to clear your balance in full each month to avoid interest.
Have some savings
Having savings shows you’re financially aware, planning for any eventuality and have a handle on finances. All things a lender wants to see.
Savings also prevent you needing to get into debt when tackling emergencies or when something goes wrong.
Keep an eye on your credit report
You’re entitled to one free credit report, per bureau per year, so use them to keep an eye on your credit report. Check for errors, omissions and unauthorized activity.
Staying on top of your credit report will ensure you always know what’s going on and can spot any issues quickly.
Do all these things and you’ll not only maintain your credit score, you should be able to increase it too!
Then, when you’re ready for your next London auto loan, you can contact our team for a competitive deal.
If you need help or advice on anything to do with auto loans in London, contact Car Nation Canada today, we can help!
For any questions or concerns, please don't hesitate to contact us here!
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