One way to improve your financial position is to keep tabs on your credit score. It’s an integral part of almost every major purchase you will make in your life. Here are 8 ways to keep your credit score as good as possible.

 #1 Check your credit report

Keeping a pulse on your credit report is an essential first step to the process. Your credit report is the information collected by credit bureaus (TransUnion and Equifax are the largest in Canada) about how regularly you pay your bills, how much debt you have and other financial details. This is what banks and other lenders use to determine if they’ll give you money and credit.

You should check your credit report twice a year. You can get a copy of your credit record for free. Not only is it an opportunity to correct any errors but it can also quickly alert you to identity theft.

#2 Pay off your debt

Obviously banks would rather lend to people who aren’t struggling to pay off a lot of other loans and debts. Paying down debts will reduce interest payments and will allow you to keep more money in your pocket. That improves your debt service ratio.

This ratio shows the credit bureaus what percentage of your credit you are using. Lower percentages look good, whereas higher percentages can negatively impact your credit score.

Paying off your debt is a critical step in improving your overall credit.


#3 Maintain accounts in your own name

Ensure that any services or products you use have you listed as the account holder. This will allow the payment history to be associated to you.

For example, if your parents bought you a cell phone plan in their name for your 18th birthday, and you’ve been the one making the payments, you will not be benefiting from your great payment history.

Instead, make sure to add your name as the account holder. You’re making the payments, you might as well get the credit for it.

#4 Pay on time!

One of the most important questions lenders ask when considering you for credit is whether or not you make your payments on time. Missed or late payments are a big factor in your credit score and,  if you consistently miss or make late payments, it can really hurt you.


#5 Setup payment reminders

A good way to stay on top of your payments is to set up payment reminders for yourself. Find an app that can send you notifications and book yourself an appointment to make payments.


#6 Dispute errors

If there is inaccurate information on your credit report, you can contact the creditor and request to have the inaccurate information removed.

There’s no guarantee that they will help you out and there is no obligation on their part to do so. The way to approach this is to make sure that the issue has been resolved on your end. From there, reach out to them and provide an explanation for why things went the way they did.

Be kind and sincere when contacting them and hope for the best! It also helps if you’ve been making payments to them on time since the negative incident.

#7 Settle debts with collections agencies

Collection items reported by collection agencies could seriously impact your credit score. Pay them.

Be aware that paying off a collection account will not remove it from your credit report but the collection agencies will update the credit bureaus with your payments. The collection items as well as your payment history will remain visible for seven years. The sooner you pay off any collection agency, the sooner it will be removed from your credit report.

#8 Have patience

If you follow these steps, you’ll have a good chance of improving your credit score, but it won’t happen overnight. Stay consistent with your payments, keep your balances low and be the type of person to whom you would be comfortable lending money. After some time you will reap the benefits of an improved credit score.