A lot has happened in 2020. Most of us have faced situations that we didn’t anticipate at all – including temporary lay-offs, job losses, and more.
If COVID-19 has impacted your credit score, you’re not alone.
If your credit score has taken a hit, you can almost always build it back up! Just making small changes to your spending and borrowing patterns can make a big difference.
To ascertain what you can do, to bring your score back up, it’s helpful to know about the components make up your credit score. These include:
· Your payment history on loans and credit cards;
· Your revolving credit;
· Length of duration your accounts have been open;
· The types of accounts you have;
· And your overall debt.
Here are a few changes you can make:
a. Pay The Bills On Time
This may seem like the obvious answer but it’s true. The single easiest way to maintain good credit is ensuring that you’re making timely payments when it comes to your bills and credit cards.
Though, this doesn’t have to be a big cash outflow for you. For instance, when it comes to credit cards, just paying the required minimum amount, shown on your monthly statement, can help in saving your credit score.
b. Keep Your Credit Utilization Rate Low
This is quite important. Credit utilization rate is a ratio that is obtained by dividing the amount of revolving credit you’re currently using by the total amount of revolving credit you have available.
For instance, if you spend about $1,000 every month and your total credit limit, across all your credit cards is $5,000, your utilization rate is 20%. The ideal ratio should be below 30%. So, keeping a track of this percentage can positively impact your overall credit score.
c. Keep Older Accounts and Cards
This may sound counterintuitive, right? The more accounts and cards you have, the harder it is to keep track of the activity on each of them.
The reason it is recommended to keep your old accounts and cards is that the age of the oldest account affects your credit score. So, by keeping older credit cards and accounts open, you’re not just building your credit history but also your total available credit (which affects your credit utilization rate).
d. Keep Your Information Up to Date
One of the simplest mistakes, that affects the credit score of many individuals is failing to update their address or other contact information.
So, at times, the bills and notices are being delivered but you’re not getting them. Once, these go unpaid, your credit score takes a hit.
When it comes to maintaining a good credit score – time is your ally. It takes time but if you diligently follow a timely payment schedule, monitor your accounts, and keep your contact information up-to-date, you can improve your credit history.
… and when employers or financial institutions obtain this information next time around, you can always be at ease.
At Triton, we assist both individuals and organizations in obtaining background checks securely and easily. To learn more about our services, please call 1-844-874-8667 or visit https://www.tritoncanada.ca