You've been thinking about starting the process of buying your first home in the next few months and you're concerned about the viability of your credit rating. Is your concern caused by poor credit management or financial blunders from your past? Regardless, it is possible to improve your credit rating by taking concrete actions. In this article, we suggest some actions that will have a real impact on your credit rating.

Your budget, the basis of your financial health

If your credit management has put you in a precarious financial situation, it's likely that your planned budget was not respected... unless you never made a budget beforehand! First of all, identify the reasons why you are in debt. Without a budget, it will be difficult to improve your credit rating.

Pay your bills and credit card in full... and on time!

In a perfect world, you would pay your bills and credit card payments in full and on time. By paying them in full, ideally before the set deadline, you will have a significant impact on your credit rating.

To help you manage your credit card, we suggest that you use less than 50% of your limit. For example, on a $5000 limit, you should only use $2500. Also, only have one credit card, because having several similar types of loans is bad for your rating.

Avoid repeated loan requests

Repeatedly applying for loans leads your lenders to believe that you are at risk of going into debt. If these multiple applications are denied, your credit score may suffer. In the case of a mortgage loan, if you make several simultaneous requests to several financial institutions, your requests will be considered as a single consultation on your file. On the other hand, if your requests are spaced a few months apart, several consultations will be recorded, thus affecting your credit rating.

Furthermore, we advise you to vary your loan types. If you have taken out a car loan, a credit card, and a mortgage and if you manage these loans rigorously, you will enhance your creditworthiness with your lenders.

Keep your old accounts open and be stable

A long credit history helps reassure lenders of your stability. So if you don't need to change financial institutions, don't. If you've been a good payer for a long time, with the same lenders, it will show up on your score. Having a stable job and living at the same address for a long time will also help in reassuring your creditors.

Finally, we recommend checking your credit report at least once a year and don't forget to consult it before applying for a loan. To obtain it, simply fill out the online forms at www.equifax.ca or www.transunion.ca.