In today’s lending environment, a great credit score can save you thousands of dollars in interest.  Borrower’s with great credit have access to loans with great terms and rates.  If you are like millions of Canadians with questionable credit, Home Loan Direct has the ability to help you; not only does Home Loan Direct offer the following tips on how to improve your credit score, but we also help all of our customers complete the process of credit repair by offering free enrollment in our Credit 4 Life Program.

Repairing your credit score takes time, patience, and most importantly perseverance.  Depending on your individual situation, the credit repair process can take anywhere from 6 months to 2 years.  With the correct use of mortgage loans, credit cards, personal loans, and more, the credit repair process will not only bring you a fantastic credit score, but it will give you sound financial practices to follow for life.

The following are some of the most valuable and effective tips to repair credit:

Your credit score is heavily dependant on how much you owe in relation to your income, as well as how much remaining available credit you have.  If you have several credit cards that are all maxed out, it will have a significant negative effect on your credit score.  Any cards on which you owe more than 70% of your available credit will have a negative effect on your score.  Always make sure to PAY YOUR MINIMUM MONTHLY PAYMENT.  By reducing credit card debt, not only will you be freeing yourself from overbearing interest rates, but you’ll be giving yourself a sound foundation to begin making these important financial practices a regular part of life.

Credit inquiries can affect your credit score in a negative way.  Two or three inquiries in a six month period will not have a negative impact on your score, however, if you are rate shopping and/or having multiple inquiries in a short period of time, there will be a very negative impact on your score.  In order to keep inquiries to a minimum, be sure to review anything you sign, and if a credit check is required you may want to think about whether or not you need the product.  It is also advisable to check your credit yourself once a year to ensure that no one is making un-authorized credit inquiries.

This seems like common sense, yet thousands of Canadians have late payments scattered throughout their credit reports.  Every late payment beyond 30 days sends up a red flag on your report.  Lenders can see these late payments when they check your credit.  Late payments also negatively impact your score, with the most recent having the largest impact.  A history of prompt payments not only shows potential lenders that you make all payments in a timely fasion, but also is a great way to help boost your score.

A secured credit card can be one of two things:

Both of these options are great ways for people with severe credit problems to get a credit card and begin the rebuilding process.  Once they are set up they work exactly like a regular credit card.  Be sure to use the card carefully and make all payments on time.  Secured card companies report payment activity on a monthly basis to the credit reporting agencies.