Always stay on Always stay on top of your personal and commercial credit bureau!
I want to bring to your attention the importance of keeping on top of your credit report (both personal and business) and also dispel a primary myth about credit report scoring or beacon score.
If you don't already do it, you should check your credit report at least once per year. The main reason for doing this is to make sure your information on file is correct and to minimize any fraudulent activity. I can't tell you how many times I work with a business and the information on the corporate and personal bureaus is outdated or completely wrong. Reviewing your personal and business credit report at least once per year, and making sure it is correct, will save you headaches when it comes time to borrow money.
The road to getting your credit score in the 800’s!
One question DEROTTO seems to frequently get asked is how to raise your credit score. Your credit score is incredibly important. It can represent an understanding of your creditworthiness and may help creditors decide what kind of risk you are and what interest rate you will be offered. Having a strong credit score can save you thousands of dollars over the course of your life. Listed below are some simple tips you can focus on to improve your credit score.
You can access your credit report by visiting the Canadian Equifax or Transunion website.
Pay bills on time. Even if you cannot pay in full, be sure to make the minimum payment.
Have history. Every business or individual needs to borrow money to create a history. Even if it is just for a small amount. Without history, the lender has no reference.
Watch your credit card balances. Make sure you’re not using too much of your available credit. Aim for 30% credit utilization or less.
Don’t mindlessly open new credit card accounts. If you apply for new cards, make sure you don’t do so too frequently. This behavior may look irresponsible to creditors.
Alert banks and card companies when you move. You don’t want to see your bills go unpaid because the mail didn’t go to the correct address.
Check your accounts online. There’s no reason to wait for the bills to come in the mail. You should make sure payments are clearing and cards are being kept current.
Pay off delinquent bills. Paying down delinquent accounts won’t remove missed payments from your report. But it can make you look better to creditors.
Look for inaccuracies. Sometimes information reported to the credit reporting agencies isn’t correct or is incomplete. By reviewing your personal and business credit report at least once per year, and making sure it is correct, will save you headaches when it comes time to borrow money.
FICO or Beacon credit scores are used by more than 90% of lenders. Credit scores range between 300 and 850. In general, scores above 650 indicate a very good credit history. A credit score is composed of five distinct factors:
Payment history (35%)
Credit usage(30%)
Age of credit accounts (15%)
Credit mix (10%)
New credit inquiries (10%)
One of the credit report myths we hear often is "I don't want you pulling my credit report because it will lower my beacon score". Most people are unaware that credit inquiries have the least negative impact on a credit score. Credit scoring calculations take appropriate steps to ensure that a credit score is not lowered because of the multiple inquiries that might occur at a specific time as a result of shopping for the best terms for an equipment lease or business loan for example. Inquiries have less importance than delinquencies, balances owed, and the length of time you have used credit.
It can take several weeks, and sometimes several months, to see a noticeable improvement in your credit score once you start taking steps to turn it around. However, the sooner you begin working to improve your credit, the sooner you will see results.
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