Here’s how to Effortlessly Build a Top-Notch Credit Rating.

As you plan your financial future, your credit score is top priority. It is your financial lifeline, helping lenders decide whether to take a chance on you with loans, credit cards or mortgages; whether to offer you favorable interest rates; and even potential landlords and employers may request it. A healthy score offers a wealth of privileges in our society.

It tells lenders that you are responsible and smart about handling credit. And that’s the first hurdle: getting credit when you don’t have it yet. If this is where you’re at, build your financial literacy: start with a secured credit card or ask to be an authorized user on another person’s card—someone with an excellent credit history, of course. Then get busy using it.

That’s the fun part. But showing you are a responsible credit risk also means no missed or late payments on loans and other credit. This is fundamentally important. Never miss a payment, and your score will happily reflect this. Automate your bill payments and ensure they are never late.

If you’re not sure where your credit score stands, find out now. In Canada, the two major credit-reporting agencies are Equifax Canada and TransUnion Canada. Getting a free, yearly report from both is financially smart (they each report credit differently).

The score will be three digits from 300 to 900; and anything below 600 means you need to get busy. Here are some simple ways to improve your score.
Are there errors on your report? Gather your evidence and make your case for getting it removed. Do this check-up yearly to ensure your credit score stays healthy.

Are your cards maxed out? This will reflect on your score. Get busy budgeting and pay them down. Or consolidate with a balance-transfer credit card. Leverage that low, introductory interest rate and pay off as much as you can before it goes back to normal.

When shopping around for many loans, every application (a ‘hard inquiry’) will drop your score. So, proactively plan your finances. Check if the loan will cause hard inquiries; confine your search to the applicable time frame; and it will all get recorded as a single inquiry.

Take note, your own personal inquiry won’t affect your score. Two more tips: never cancel old credit cards in good standing, and vary your credit—a mix of cards, installment loans, lines of credit, mortgages—to prove you are a good borrower.

Contact your financial advisor to plan the best steps to get you—and your credit score—ready for a financially healthy, satisfying future. If you don’t have one, let’s book a call!