What is a credit score and why should I care about it?

 What is a credit score and why should I care about it?

A credit score measures your ability to pay the debts. Simply, with a high credit score, you are more reliable to your credits, more likely to pay back the borrowed money.
A high score helps you to get approval for loans and mortgages.
A credit score is a three-digit number lie between 300-900
Every credit score bureau agency has a different score range. The Equifax has the following score range distribution ranging from poor to excellent

Now, why there is a need to improve credit history?
Poor credit history means a higher risk of getting approval for mortgages and loans. Also, approval with higher interest rates. A person with a credit history between good and excellent get their approvals easily with lower interest rates.
How I can improve my credit history by following simple tricks.

1.Check your credit score: to improve your credit score, you need to check your score first. You need to know where you are, and where you have to reach.
For example, it takes more time to reach at 740 from 575 compared to 690 to 740. So more effective measures need to be taken.
Check your credit score for free at 
Borrowell: https://borrowell.com/free-credit-score?utm_source=ShareResults&utm_medium=Referral&utm_campaign=a-27866b-24214c-
Credit karma: https://www.creditkarma.ca/
2. Use a credit card for the payments: cash or debit payments don’t count to your credit score. So, go for a credit card for payments of your expenses such as phone, internet bills car loans, etc. every payment made by your credit card helps you to build your credit score.
 Newcomers in Canada sometimes not get a credit card right away. There is a solution for them. They can open their secure credit card; they have to deposit a refundable amount of 500-1000$ to their account to get credit cards. When regular payments are made by users, they become eligible to increase their credit limit.
3.Pay bills on time:  this is the major factor of credit history.35 percent of the credit history depends upon secure payments, which is the highest chunk. If you do not make payments on time, it directly affects your credit history drastically. One missed payment can lead to a decrease in 90 scores of your total credit score.so, never forget to pay your bills.
4.Reduce credit utilization. If your credit utilization is more than 30 percent, it is affecting your credit score. You need to reduce it. If your credit limit is 1000 dollars, your spending should not increase 300 dollars., Equifax looks at your credit utilization. Carrying a large balance on a card indicates you are not able to return back the amount you have borrowed, which reduces the credit score.
You can increase your credit limit if you have more expenses or you can use multiple cards.
5. do not cancel a credit card: your credit history builds with the age of your card, so never go to cancel your card after a few years. The older the card improved your history. If you cancel your card, your build history gone wasted. You have to wait for years to build the new one. So always go to improve the credit score not to cancel the card.
 6.Cautious to buy additional credit. When you go to buy another credit, your history is impacted. Once a month doesn’t impact much, but every week if you go for new credit, it will surely decrease your score.
7.Credit inquiries: however, it only impacts 2-3 scores, but it reduces your score. A period of 2 months is acceptable to go for an inquiry of your credit score.

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