Build Credit Plus 4 Tips To Boost Score Overnight | Refresh Financial

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How Long Does It Take To Build Credit Plus Tips for Boosting your Score Overnight!

If you've come here, you're probably looking to increase your credit score quickly. While there's no magic wand that will improve your credit score overnight, you can start taking steps today that will start having an impact tomorrow. It's important to note that when it comes to credit, credit score, and credit reports, no two people are the same. Some of you are going to be coming from poor credit, others from fair credit and some of you may even have no credit score at all and you're building credit from scratch. Calculating how many months it will take to build your credit score is all going to depend on what you’re starting with, and how serious you are about increasing your credit score.

Where are you starting from?

Check your credit score (free on our website) and get your free credit report. You’re going to get a better idea of how long it will take to improve your credit score if you obtain your credit report. On it, you may see late payments or borrowed funds you may have defaulted on. You can also see good behaviour, like paying more than just the minimum payment each month. You’ll see how much credit you have to your name, and how much you use it.

All of these factors add up to your credit score, and can have a big impact on how long it takes to improve it. It will also help you to identify what you can do to improve your score. Not sure how to read your credit report? Check this post out. 

Take steps to become more informed about credit

What are the problems that have led to your poor credit score? Is it overspending, living beyond your means, missing payments, or making late payments? Understanding where you went wrong means you can avoid repeating the same mistakes going forward. If you’re using too much of your credit, making your credit utilization ratio high, you’ll need to work to bring that down. If you’ve had too many inquiries into your credit recently, you’ll have to stop applying for anything that requires a credit check for at least six months. If you frequently make late payments on your credit cards and other bills, you’re going to need to organize yourself and budget your money better so you can make all of those payments on time.

You’re already in the right place to become more informed about what is slowing down your credit score increase.

What if I have no credit?

If you have no credit, and therefore have no bad credit decisions to correct in your report, building your credit can be faster. All you have to do is get yourself a credit building product or two, like a secured card or a credit builder loan, and use it responsibly, by making your payments on time and keeping your utilization ratio down.

What if I’ve declared bankruptcy?

If you’ve declared bankruptcy in the past, it will remain on your credit report for up to seven years and does have an impact on your credit score. It is still possible to build your credit with a bankruptcy on your file, but you will not see the full benefits of having good credit until that 6-7 year waiting period is over. The same goes for a consumer proposal, with one difference: a consumer proposal will only stay on your credit report for three years.

The ‘golden rule’ when building your credit score

No matter where you’re coming from, it’s important to start building your credit sooner rather than later. The sooner you start working towards a better credit score, the sooner you will see that better credit score. You can easily start today by finding a credit rebuilding program that works for you or by applying for a credit card and going from there. If you’re fully committed to cutting back and sacrificing and learning how to build credit, you can improve your credit score in a matter of months.

How to build your credit

There are several ways to build credit.  Read The 5 Easiest Ways To Rebuild Your Credit As A Canadian which covers the many avenues you have available to you in Canada to rebuild your credit score. Two of the fastest ways to build credit are noted below:

1. Get a secured card

A secured card is a low risk to lenders because you’ve put down some money just in case you default on your payments. If you take out a secured card, you should pay your minimum payment every month, just like any other credit card. Even though your credit is secured, this good behaviour is going to be reported to the credit bureaus every month. It is key to make sure your payments are made in full and on time every month to avoid any derogatory remarks on your credit report.

2. Get a credit builder loan

A credit builder loan is essentially a credit building loan. You make regular repayments of an installment loan (which is reported to two credit bureaus) and  at the end of the program you have a nice stash of cash to use however you want, and more importantly, a shiny new credit score! Once you’ve begun a credit builder program, the time it takes to see your credit score go up is going to depend on your willingness to sacrifice and learn how to rebuild credit. The faster you can bring your existing debts down, the quicker your credit score rating will rise. Cut down where you spend the most, and drastically reduce the money you spend on day-to-day life. If you can, pay well over the minimum payment each month.

If you’re taking it this seriously, it can go from poor to fair, and maybe even good in less than a year. However, if your approach to improving your credit score is just a little bit more relaxed, it could take over a year to see real improvement.

Boost your credit score almost overnight!

When you think about increasing your credit score, you might assume a long and drawn out process that requires lots of self-discipline and sacrifice. For the most part, this is quite true. However, it's not always the case. Here are 4 tips that will boost your credit score almost overnight.

1. Pay Off Big Portions Of Debt At Once

This strategy isn't always possible, but if you have savings or a large tax refund, or maybe even an inheritance, throwing that money towards your debts will result in a boost to your credit score. Your credit usage percentage is a huge factor in determining your credit score, the lower it is the better. If you can lower your usage below 30% with one payment, you'll see a big difference on your credit score fairly quickly.

2. Accepting A Credit Increase

Accepting an increase on your credit limit will lower your credit usage percentage immediately. This is how it works: If you’re carrying a balance of $5000 on a card with a $10k limit, your usage percentage is 50%. If you have your limit increased to $15k, your usage percentage is now around 33%. Without even lowering your balance, you’ve improved your usage percentage which will improve your credit score. The risk with this strategy is that an increased credit limit can result in more debt if you can't manage your spending.

3. Mixing Your Credit

Mixing the types of credit that you have can be a great way to improve your score. You want a healthy mix of installment and revolving credit for diverse reporting. The best way to do this without any risk is through a cash secured savings loan. Click here for more information!

4. Correcting Mistakes On Your Credit Report

This one will only work if you've found any errors or debts on your credit report that shouldn't be there. Reporting errors occur more often than you may think, so check your report frequently. As a Canadian, you are entitled to one free credit report from each bureau per year, but we recommend paying to have unlimited access to your credit report so that you will be aware of any changes to your score as they happen. If you notice a mistake on your credit report, dealing with it as soon as possible will reduce the amount of damage to your credit score. Removing debts that don’t belong will cause your credit score to go up.

At the end of the day, the best way to ensure a strong and healthy credit score is to ensure that you make all of your payments on time and in full.

Interested in seeing how long it will take to build your credit? Find out more about the credit rebuilding programs at Refresh Financial.

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