5 Signs You’re Mishandling Your Credit – And Could Be Damaging Your Credit Score

Automotive Finance, Credit Education, Used Cars

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getting a better deal on used car

If you’re interested in buying a used or a new car, you’ll need a good credit score in order to get a great deal on your loan. But if you don’t know your credit score – or if you have a bad credit score – you may end up paying quite a bit more for your loan, and a higher price for your car.

However, many Canadians don’t know how to tell if they have a good credit score, and don’t recognize the signs that they may be mishandling their credit, and damaging their credit score.

In this article, Ride Time will take a look at some of the most common signs that you could be using your credit poorly – resulting in

1. You’re Late On Payments, Or Missing Them Entirely

Many people don’t quite understand how damaging it is to their credit score when they miss a payment, or if they are late when paying.

A single missed payment can damage your credit score by 90-110 points, if it’s delinquent for more than 30 days. In addition, a missed payment will result in a larger minimum monthly payment – because interest will be added to the entire balance of your credit card payment.

Because of this, being late or missing a payment can cost you quite a bit of money, and have a huge impact on your credit score.

2. You’re Paying Only The Minimum Monthly Payments – And Your Cards Are Maxed Out

Paying minimum monthly payments is a good idea if your alternative is missing a payment completely – but that’s the only scenario where it’s preferable. You should be paying your balance every month, and paying down additional money towards your debt, whenever possible.

And if your credit cards are all maxed out, you will have a very high debt utilization, which is a big factor in determining your credit score.

3. You Keep Moving Your Balances To New Cards

Sometimes, applying for a new credit card can be a good idea if you have a small amount of debt on other credit cards, or you wish to consolidate your credit card balances. Most credit cards offer a “0% APR” period where you won’t pay interest on your balance – and allow you to transfer balances from up to 3 credit cards to your new account.

Doing this once is a good way to consolidate your debt, or get a lower interest rate if you qualify for a better credit card. But if you start to “juggle” credit cards by moving their balances to new cards, chances are you’re swimming in debt – and your credit score is going to reflect this.

4. You’re Applying For New Credit Cards – While You Still Have Outstanding Balances

As a rule, you shouldn’t be applying for new credit cards while you still have large, outstanding balances on your other credit cards. This is a sign that you are managing your debt poorly, and need a new line of credit because you can’t afford to pay off your other debts.

5. You Haven’t Checked Your Credit Report

Even people with decent credit scores are guilty of this. Knowing your credit score is very important – whether it’s good or bad. Knowing your credit score helps you negotiate for a better rate on car loans, for example.

In addition, knowing your credit score lets you track both positive and negative fluctuations. If your credit score goes down and you’re not sure why, you can check your credit report, and see the reason – if it was an error, you might be able to get it corrected or expunged.

Get A Better Credit Score – And A Better Deal On A Used Car!

Rebuilding your credit is not easy – but if you recognize these 5 warning signs of bad credit, you can start taking steps to handle your credit more effectively, and rebuild your credit score.

Interested in getting a used car – but not sure if your credit is good enough? Ride Time is the best choice for you! At our used car dealership, we specialize in working with Canadians who have bad credit.

Give us proof of employment for 3 months, a valid licence, and proof of a $1,500/month income before deductions, and we will work with our 15+ specialized lenders to get you a great deal on a car. Browse our stock now!


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