How To Build Credit Score In Cayuga
How To Build Credit Score In Cayuga
Posted on April 22, 2021
Learning how to build credit score is something that begins when you turn 18 and never really stops. If you’re a young adult or new to Canada, you’ll both need to build credit to be able to access the majority of financial products. But how do you go about it? How long does it take? Are there ways to accelerate the process?
Our Cayuga car loan team outlines everything you need to know about building credit in Canada.
Building credit in Cayuga
If you don’t have credit, you’ll likely have a 300 score to begin with. This is the minimum score possible and will be purely down to the fact you don’t have a credit history.
This won’t prevent you from accessing credit but it will make it more difficult. Initially, your options will be limited to bad credit car loans and secured credit cards.
How do you build credit?
You build credit by using credit. Your score is a reflection of your credit history and to have one of those, you first have to use credit. It’s a circular argument but one we all have to live with.
Your first option will likely be a credit card. They are an accessible form of credit, readily available and anyone, with any credit score can apply for one.
If you’re just 18, use a secured credit card to help build credit. If you have a lot of savings, you could ask your bank for a standard card. As you will be in good standing with them thanks to those savings, they may let you have a standard card.
Use the card for everyday purchases and repay the full amount each month. Don’t spend what you cannot afford and settle the amount in full to avoid interest. Set up automatic payments for the minimum amount but never rely on that minimum.
How long does it take to build credit?
The time it takes to build credit depends on what you do about it. Regular credit card use and never missing a payment will begin increasing your score within 3-6 months.
As long as you never miss a payment, your score will climb steadily. You should find your score is healthy enough after around 18 months to apply for other credit such as standard credit cards if you don’t already have one, auto loans, personal loans and other products.
Are there ways to accelerate the credit building process?
Not really. Using a credit card and repaying every month is a very efficient way to build your credit score. You can add to that with a phone contract, asking your landlord (if you have one) to enter payments onto your credit report, asking utilities to do the same.
The rest is down to patience and being sensible with money.
Why your credit score matters
Credit reports and scores influence many areas of life. The higher your credit score, the lower the interest you’ll pay on borrowing. Some employers and apartment rental companies will also check credit scores to assess potential liability.
Even if you have no intention of using credit right now, it is likely you will at some point. Maximizing your score and building it over time means you should have a higher score when you do need to borrow such as when you want a car loan.
Contact Unique Chrysler for help, advice and competitive Cayuga car finance and leasing.
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