There are no shortcuts or quick fixes to rebuild a damaged credit rating.  Getting a good credit rating requires a history of using credit properly, borrowing and paying back amounts owed in the appropriate billing period, and maintaining manageable debt levels.

STEP 1: Get out of debt

It is impossible to rebuild or improve your credit rating if you are burried under a mountatin of debt.  The first step to improving your credit rating is to get out of debt.  In some cases this may mean taking action that will harm your credit rating in the short-term, but this is a critical and necessary step to improving your credit rating in the long term.   

Step 2: Make sure the information on your credit report is correct

There are two major credit reporting agencies in Canada, Equifax and Transunion.  You can get free copies of your credit reports from these organizations through the mail.  It is recommended to get copies of your credit report from each of these companies as the information reported may vary.  Once you have your reports review them to make sure that all of the information being reported is consistent and correct. 

STEP 3: Correct any errors which may exist on your credit report

If there are errors or inconsistencies on your credit reports you will need to contact the credit reporting agency directly and work with them to have the errors corrected.  It can take some time to get errors corrected.  Therefore, it is best to be proactive and correct errors as soon as possible. 

STEP 4: Get good marks on your credit report

Your credit report is effectively a summary of how you have dealt with creditors in the past.  In order to improve your overall credit score you need to get good marks on your credit report by borrowing money and paying it back.  Creating a track record of using credit properly will improve your credit score over time.

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