How to increase your credit rating?


There is no easy hack to boost credit score. But a persistent approach can help.

Debt to income ratio

Understanding your debt-to-income ratio (DTI) is key here. A high DTI emphasizes the need for immediate action such as reducing mortgages and cutting unnecessary expenses. The reduction of the mortgage loan can be accompanied by a refinancing of the current mortgage. Unnecessary expenses can include not using cheaper public transport when it is readily available.

Make some quick fixes

Get an idea of ​​what your credit looks like by accessing the full credit report. List all accounts and cards that are in default or in collection mode and sort them by paying off or extending the term of the mortgage. Negotiate with lending institutions and loan companies to write off some late payments, if possible. This alone can slightly improve your credit score.

Next, make sure no payments are delayed and avoid asking for new lines of credit. Holding multiple cards or taking out new loans can lead to a vicious cycle of accumulating debt.

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Generate income from existing wealth

It is never a bad idea to make money from the money that is left unused in the savings account with the bank.

While there are many conventional options like term deposits and retirement plans to put money into, a few less conventional assets, due to their variable returns, may be preferred. The best of them is to invest in the stock market.

Did you know that the S&P 500 index gained around 27% in 2021? The index, which includes stocks from various economic activities including software and car manufacturing, can be tapped for a quick extra few dollars to pay off pending dues on any loan or credit card.

Data provided by

In Canada, the benchmark TSX Composite index gained nearly 20% last year. The index touched new scales during the year despite the country’s weak macroeconomic indicators amid the pandemic.

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At the end of the line

Knowing your level of debt, which can change every few months, is extremely important. This can give you an idea of ​​your impulse spending and/or moderate income. The United States is a diverse economy with diverse spending habits. But the suggestion to increase credit rating remains universal in nature: perseverance and a debt-free approach.


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