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young married couple reviewing credit counselling for their credit card debt in ottawa

Your credit rating can have a vast impact on your everyday life--especially if you are getting ready to start a family.

To ensure your credit rating stays strong, D. & A. MacLeod has prepared a list of the top five credit mistakes that we see people make and how you can avoid them.

  1. Don’t pay off your credit card too quickly. Lenders always examine how you pay off your balance each month. This is how your credit rating is determined. Paying off your entire balance on the due date is fine, but it is best practice to leave a bit of time between purchasing and paying off so the activity is properly reported to the credit bureaus each month.

  2. Don’t wait too long to pay off your balance. Carrying a balance for years can negatively impact your credit rating. If you are living payment to payment with a large balance, it shows lenders that you may be more likely to default on your loans.

  3. Closing an account with a balance owing does not help your credit rating. Many people do this to control their spending, but it can backfire in the long run. Credit cards show what you owe relative to your purchasing power. If you close your account with an unpaid balance, it will show that you have a debt with no purchasing power.

  4. Beware of limited use. If the account is not used on a regular basis, you may not receive monthly statements. This means if your account becomes compromised, it could be a long time before you notice the transactions. As a result, credit card companies consider an unused account to be a liability.

  5. Avoid late payments at all costs. Late payments make lenders wonder if you have an income problem. It can also result in lenders deciding that if you can’t pay on time, you have too much available credit. What you earn and your available credit are two important factors in determining your credit rating, especially with a new application. Showing yourself as a high-risk means higher fees and interest rates, in addition to greater restrictions and limits.

If you need help maintaining a good credit rating, the teams at D. & A. MacLeod are ready to assist you. We provide credit counselling and debt help throughout the Ontario region. You can call our team directly at 613-699-2538 or contact us online for a free, no-obligation consultation and let us help you on the road to a new beginning™.


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