think your credit score is okay because you are making minimum payments?
TRANSCRIPT
THINK YOUR CREDIT SCORE IS OKAY BECAUSE YOU’RE MAKING MINIMUM PAYMENTS?
THINK AGAIN...
One of the most common mistakes people make when it comes to debt management is thinking that their credit score is okay because they’re making minimum payments.
It’s the regularity of the repayments that matter and not the amount being repaid.
Many people believe that using one credit card or line of credit to make a minimum payment on another is actually a good strategy that protects their credit score.
It’s not a good strategy and doing this actually worsen your score!
So what are the important factors to consider that make up your credit score?
KEY FACTORS CONSIDERED WHEN CALCULATING YOUR CREDIT SCORE INCLUDE
● Payment history● Knowledge (Up-to-date information)
Payment History really means that a credit agency will check several things…
Payment History really means that a credit agency will check several things…
● How many accounts you have that are up-to-date on payments● How many times you have missed a payment● How many accounts are past due● Where or not you have ever had an account sent to a collections department● If you have ever had a bankruptcy/lien or other legal actions taken against you
If you’re using 75% or more of the credit available on your various cards and credit lines, this will damage your credit score.
Making minimum payments on a card at or near it’s maximum is NOT going to help your score.
Applying frequently for new credit will worsen the credit score as it can be a warning sign that a person is in financial trouble.
The length of time you have had credit will also impact your score. The longer you have had credit and maintained it, the better your credit score will be.
KNOWLEDGE IS POWER...
You can order a free credit report from Equifax or TransUnion if you want to know your credit score
Make sure you review your report to ensure that there is no incorrect information on it, as it is not uncommon for incorrect information to exist on your credit report.
If after receiving your credit report you are concerned by what it says, BDO - Oshawa offers a free, no-obligation consultation with a licensed Trustee.
Contact BDO - Oshawa, if you would like to discuss ways to improve your credit score and your overall financial picture through credit counselling, budgeting, consumer proposals, or, last resort bankruptcy.
CONTROL YOUR FUTURE WITH BDO
For a free second opinion on your financial situation and available options to help you restore or improve your credit score, you can call or email us at...
(905) 436-9100