Reduce debt-to-income ratio
A creditor will always consider whether the borrower can pay off their minimum loans. If the money you are using is going towards existing obligations, the creditor has the right to decline the loan. To avoid this, make sure that you increase your debt-to-income ratio and stop all the card activity in order to avoid additional borrowing.
Accept offers of Credits through Banks
If your bank is promoting their lines of credit, make sure that you try to get a small credit line. If it’s approved then your line of credit should be used regularly but be careful while using it as it can either establish or demolish the consistency and trustworthiness.
Stop the bleeding
There some things that you have to keep in mind in order to raise your credit score. Those are:
• Pay all your bills on time
• Pay down debt
• Avoid applying for credit
Get a Co-Signer
How to get a loan with bad credit? Well, now we have an answer to that. Try getting a co-signer because, with a co-signer, your loan’s interest rate will be calculated based on the credit rating of the person you sign with. So find someone who does not have bad credit loan, Canada and trusts you to repay the loan. The person will be equally responsible for the payment so be careful.
Before you start applying these tips, you must make sure that you are not spending more than you earn. You should have a budget to keep everything organized. Start it from reviewing your tax returns for the past two years so that you get a sense of how much money do you take at home in a year. Then subtract your regular monthly expenses like rent, car payments etc. from your current income. Start making limits on how much can you spend on different categories.
Make sure that you do not go over the limit of the credit card. Make sure that you try to keep the balance under the limit. As you balance grows higher and higher, the more impact it will have on your credit score. If you use a lot of your available credit, lenders start seeing you as a greater risk. The case continues even if you pay your balance on the due date.
Deduct the number of credit applications you make. It too many lenders ask you about your credit in a short period of time, this will build a negative effect on your score but asking for information about your own credit card will not affect your credit score.
Having a decent credit score will ensure guaranteed approval of loan application in the future. Even if you have a bad credit score, you may find a lending company that can help you to get bad credit loans in Canada guaranteed approval.