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According to the Financial Consumer Agency of Canada, the Highest credit score is 900. While it is very unusual for consumers to achieve the perfect score, many Canadians do achieve the “very good credit” range, which equates to 750 and up. There are several tips that consumers can use to help bolster a flagging credit score, or even to add a few points to a score that is already in the top tier.
The Credit Score Breakdown
Knowing the way that credit scores are broken down can help those who are trying to achieve a perfect rating. The division is as follows:
1. 35 percent: The history of payments on revolving credit accounts
2. 30 percent: The use of credit
3. 15 percent: The amount of time that a person has used credit
4. 10 percent: How much new credit a person opens up
5. 10 percent: The kind of credit that is utilized
Paying on Time
The most important factor is payment history. Making payments on time every month is absolutely essential for anyone who plans to achieve perfection with their credit rating. Even a single late payment can cause a very high credit score to take a tumble of several points. While making a payment only a day or two late does not generally incur any type of black mark on a credit report, making a payment 30 days past due does. The black marks continue to be added at the 60 and 90 day marks, as well. If there is an emergency and payment simply has to be late, it is always best to contact the lender. Often, lenders are willing to work with good customers to help them preserve their credit rating. Ultimately, it is best to make a practice of paying several days early every month. Consider scheduling automatic drafts from a bank account to make sure this happens, if possible.
The Use of Credit
The other extremely noteworthy part of this credit breakdown is the use of credit. When credit is being evaluated, lenders want to see that a person does not use credit more than is truly necessary. Ideally, a person will have access to far more credit than they ever use. The top credit agencies recommend that people who are trying to achieve credit perfection only use around 20 percent of all available credit, and even less if possible. Websites like argent direct offer further reading on the subject of how to achieve the Highest credit score possible.
