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30 Jul

How do I get and keep a good credit score in Windsor

General

Posted by: Ronnie Padilla

 

A good credit score is essential for securing favourable loan terms, lower interest rates, and even renting an apartment. Here are some key steps you can take to build and maintain a solid credit score:

1. Pay Your Bills on Time

  • Consistency is Key: Your payment history makes up 35% of your credit score, so paying bills on time (credit cards, loans, utilities) is critical.

  • Set Up Alerts: Set up payment reminders or automatic payments to avoid missed bills.

2. Keep Credit Utilization Low

  • Avoid Maxing Out Credit Cards: Your credit utilization ratio (how much of your available credit you’re using) should ideally be below 40%.

  • Pay Off Balances Early: If possible, pay off your balance before the statement date, or try to reduce the balance each month to keep your credit utilization low.

3. Maintain a Long Credit History

  • Don’t Close Old Accounts: The length of your credit history accounts for 15% of your score. Closing old accounts reduces your available credit and may shorten your credit history.

  • Use Your Old Credit Accounts Occasionally: Even if you don’t need the credit, keeping old accounts open (and using them sparingly) can benefit your credit score.

  • Don’t Open Too Many Accounts at Once: Opening several new credit accounts within a short time frame can hurt your score by lowering your average account age.

4. Limit Hard Inquiries

  • Avoid Multiple Credit Applications: Every time you apply for credit (like a loan or credit card), it can cause a “hard inquiry” on your credit report. Too many hard inquiries can lower your score temporarily.

5. Dispute Any Errors

  • Check Your Credit Report: If you spot any inaccuracies, errors or fraudulent transactions dispute them with the credit reporting agencies (TransUnion, and Equifax).

  • Get Your Free Credit Reports: You’re entitled to one free credit report each year from each major bureaus through AnnualCreditReport.com.

6. Use Credit Responsibly

  • Don’t Rely Too Much on Credit: It’s better to use credit in moderation and only when necessary, as long as you can pay it back in full.

  • Avoid Defaulting: Defaulting on a loan or credit card (like missing multiple payments) can significantly damage your credit score for years.

By following these practices consistently, you’ll build a solid credit history and improve your score over time. 

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