Past Credit Problems
If you have a history of not paying your bills on time, or if you have debt that’s gone to collections, you have what’s called “negative credit.” This type of credit can make it hard to get approved for new loans or lines of credit. It can also lead to higher interest rates and fees.
If you want to improve your credit, the first step is to understand what’s causing your credit problems. Then, take steps to improve your credit history and improve your credit scores.
What Causes Past Credit Problems?
There are a few things that can cause negative credit, including:
- Not paying your bills on time. This is the most common cause of negative credit. If you don’t pay your bills on time, your creditors will report this to the credit bureaus.
- Having debt in collections. If you have debt that’s gone to collections, it will also be reported to the credit bureaus.
- Having a high credit utilization ratio. This is the amount of debt you have compared to your credit limit. If you have a lot of debt and a low credit limit, it can hurt your credit scores.
How to Improve Your Credit: Credit Rehabilitation
If you have negative credit, there are a few things you can do to improve your credit history and improve your credit scores.
- Pay your bills on time. This is the most important thing you can do to improve your credit.
- Reduce your debt. If you can pay off some of your debt, it will help improve your credit scores.
- Increase your credit limits. If you can get your credit limits increased, it will lower your credit utilization ratio and improve your credit scores.
- Get help from a credit counseling or credit optimization service. If you need help getting your debt under control, there are organizations that can help. Credit counseling services can help you create a budget and negotiate with your creditors. Credit optimization services can help you dispute negative items on your credit report.
Taking steps to improve your credit can take time, but it’s worth it. A good credit history and good credit scores can save you money on interest and make it easier to get approved for loans and lines of credit.
How Long Does It Take to Repair Credit in Canada?
Credit repair in Canada can take anywhere from a few months to a few years, depending on the severity of the damage and the number of negative items on your credit report.
If you have a few late payments or collections accounts, you may be able to improve your credit score within a few months by making on-time payments and paying off any outstanding debt.
However, if you have a more extensive history of late payments, collections, bankruptcies or foreclosures, it may take several years to rebuild your credit.
There is no quick fix for bad credit, but there are steps you can take to improve your credit over time. Work with Cindy Janisch to improve your credit or strengthen your mortgage application in other area’s.
