One of the vital things you need to consider when applying for a loan is that you have good credit. Not only can a good credit score increase your chances of approval, but it can also influence the kind of interest rates you’ll get on your loan. It’s crucial to ensure that your credit score is always in the best shape possible.
Nowadays, any score below 600 is considered poor credit, which might prevent you from getting qualified for a loan. However, certain lenders like My Canada Payday will be more than willing to lend you money even with bad credit if other financial elements look good.
To increase your options of lenders and qualify for lower interest rates and flexible payment terms, consider working on your credit. To help you out, here are a few effective ways that you can use to improve your credit score fast:
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Lower Your Credit Utilization Ratio
Your credit utilization ratio is one of the main factors used in determining your credit score. Credit utilization ratio is normally the amount of credit you’re using divided by the credit amount available. A high credit utilization rate can hurt your scores. Always keep your utilization rate below 30% of your credit card limit. Charging only essential purchases and dividing your purchases between multiple cards are great ways to reduce your credit utilization ratio. Paying down your revolving debts can also help reduce your credit utilization ratio, improving your credit scores.
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Fix Any Mistakes On Your Credit Report
Nearly every credit report has an error. However, having a mistake on your credit report can seriously hurt your score. The impact can be more damaging, especially if the error involves your creditor reporting that you missed a payment when you actually didn’t. Request your credit report online via Equifax, Experian, or TransUnion and review it carefully for any errors or inaccuracies in data.
File a dispute with the credit bureau for even the most minor error you find on your credit report. This will help remove any incorrect information from your report and fix any errors promptly. Once the credit bureau corrects the mistakes on your report, you’ll see your score improve almost instantly.
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Make Payments On Time
Your payment history can have a significant credit score impact. Being late on payments can hurt your score in a huge way. You want to have a long record of making timely payments to achieve high credit scores. Set up automatic payments for credit cards and utilities to help avoid missing a payment. If you can’t afford a payment, contact your card issuers immediately and discuss it and the other options available to you. Ensuring you make timely payments can boost your scores significantly.
Endnote
Seeing as your credit score is the first thing lenders check, it’s incredibly crucial that you ensure your credit report is clean and your score is as high as possible. Use the tips mentioned above to help boost your credit score fast and make it more appealing to potential lenders. You’ll stand a better chance of having your loan application approved whenever you submit it.