Free Credit Report yearly
A credit report is a summary of your credit history. It has information about your past credit and how is your performance regarding payments on your previous debt. This also contains information about your current paying bills. It is simply the breakout of your payment history regarding your credit. Obtaining your free credit report is easier because you can easily apply online. However, always remember to give correct information when filling out the form. Other consumers purposely give incorrect information, which is why they usually get rejected and are unable to get their free credit report.
What are the accounts that may affect your credit report?
Revolving credit
Revolving credit allows you to borrow a certain amount and to revolve every month after paying your credit. A credit card is one example of revolving credit. When applying for a credit card, one of the advantages of having a good credit score is you have credit card balance protection. This insurance lets you pay your minimum payment on your credit card in some circumstances. For example, you fell into illness, or you lost your job.
What to expect if you’re new to credit cards:
- You have to start from the bottom. For beginners, the best credit card is yet to be an option. You have to start from a small limit and then make an effort. Efforts include paying in full every month and not missing your due date.
- Try applying for a secured credit card. Applying for a credit card may not be easy for someone with a bad credit history or no credit. A secured credit card is just like your traditional credit card; however, you need to deposit cash when opening an account. Most likely, the credit limit is based on the cash deposit.
- Your credit card can build or ruin your credit. When applying for a credit card for the first time, make sure you can pay on time of your due date. Late payments may damage your credit score and affect your future financial decision. Always stay below your credit limit.
- Paying late has consequences. Not only will it damage your credit report it will also cost you a lot of money. The penalty can be pretty expensive depending n how long your outstanding credit is.
Instalment Credit
Instalment credit allows you to borrow huge amounts of money and lets you pay it monthly for years. A mortgage is one of the best examples of this credit. A mortgage is a type of loan often used in buying a property. It allows the lender to get the property once you fail to fulfil your payment. Usually, it is a large amount of money and is paid for how many years.
Qualifications when applying for a Mortgage:
- Annual Income. Lenders based your salary stability for at least two (2) years before granting you a mortgage.
- Down Payment. A higher down payment will result in a lower monthly payment and will most likely be approved by lenders since they will only have to cover smaller amounts. It also has a lower risk for lenders.
- Assets and Liabilities. Gross Debt Income(GDS) and Total Debt Services (TDS) ratio. GDS sees how well your income services mortgage payment and housing cost. TDS sees how well your income services all your credit. Briefly, the ratio sees how much your income is and how much you will go into paying your service debt.
- Lastly, Credit History. Of course, lenders will have to base on your credit history when you’re applying for a mortgage. Since a mortgage represents a lot of money, it is given that lenders will have to study your payment behaviour on your previous debts.
Having bad credit mortgages in Ontario can be exhausting when you want to purchase a house or a property. Maintaining your healthy credit history is a must to avoid possible troubles in the future.
Non-installment or Service Credit
Non-installment or service credit is the type of account which require you to pay in full monthly. For example, membership. For instance, if you have a membership applied at a gym and fail to pay the monthly bill, they might cancel your membership. The same goes for your water bill or electric bill. If failed to pay on time, they might cut your power source or charge you for late payment as a penalty. This may affect your credit score if you are not careful about your monthly bill.
Charge card
A charge card is almost similar to a credit card. The only difference is charge card doesn’t have a limit and is not automatically debited to your bank. You need to pay in full if you are using a charge card. Failure to pay your bill might leave a flaw in your credit score.
Life during a consumer proposal can be crucial at times. Establishing your credit is a nice habit. In establishing your credit, you must first monitor your credit history. Paying at least your monthly minimum does more than not paying at all. Second, use your credit wisely. It is advisable to only use 30% of your credit limit to build your credit report. It will help you earn a high credit score. Lastly, lengthen your credit history. Your credit history length has a lot o say when building your credit score. The longer the length of your credit history, the more chance you have of getting approved when you are applying for some credit.
In conclusion, having a healthy credit report will help you in the future, especially when you plan to own a house, car, or any other properties you want. Building it this early will only benefit you in the future.
