Finding the perfect home to rent can be very challenging. Naturally you want to do everything you can to secure one when you find it. Most landlords will do some form of screening before making a decision on your tenancy, and one of the ways is a credit check. Just remember that credit checks should be used as a last resort in tenant verification, to find out more read our blog on the rental screening process. Just in case, you should keep your credit score at a healthy level. 
If you are looking to improve your credit score but don’t know where to start? We’re here to help with a couple tips that can educate you on how to improve your score, as well as how it works.

Monitor your transactions and payments

We often don’t fully realize how detrimental missing a bill payment can be for your credit score. Procrastinating with your bill payments result in nothing but trouble, ideally, you should never skip a payment if you want to maintain a good score. However, if you do find yourself stuck in a sticky situation, your first step should be to communicate with your lender instead of ignoring it altogether. From there they should be able to help you figure out a solution.

Be aware of how much credit you’re borrowing, it will encourage you not to spend more than you can afford. Show lenders that you’re  financially responsible by keeping your spending around 35% of your total available credit. That way, they can be reassured that you won’t spend more than you can pay back. If they notice that you use too much of your credit, your lender might consider you a bigger risk as they’re aware that you only get paid a specific amount on a monthly basis.

Limit the amount of credit checks you make 

There’s no getting around credit checks, institutions will do them in certain situations to get an idea of your financial clout.  However, there are two different types of ways to check your credit score, one worse than the other: 

  • Hard Checks: these include credit card applications, rental applications and, employment applications. These checks affect your overall credit score negatively 
  • Soft Checks: include personally requesting your own report, as well as a business inquiring about your report to update their personal records. These soft checks won’t affect your credit score and while they do appear on your credit report, only you can see them. 

A good way to keep your credit score in tact is to limit and control the amount of times you apply for credit. Only apply for credit when you really need to. 

Increase your credit limit

Increasing your credit limit can have a positive impact on your credit score. A higher amount of total available credit affects your utilization ratio and further increases your score. As mentioned earlier, as long as you borrow up to 35% of your available credit, your lender would see you as being a responsible spender and be reassured that you can make your payments. 

Use your credit more

Overall, your credit score is built around you borrowing money and paying it back on time responsibly. If you use your credit more often, while also never missing a payment, lenders will see you as low risk. 

Set up automatic payments 

To avoid forgetting about a payment, set up automatic payments through your bank to make sure you never miss a bill! You can do this for student loans, personal loans, rent, car loans and any other fixed payments you have to pay on a monthly or bi-weekly basis. 

Your credit score is incredibly important to monitor and work on constantly improving. Especially when planning on moving out or getting your next car, these tips can come in handy! If you want to check your credit score, get them for free at either Borrowell or Mogo

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