We don’t know precisely how lenders calculate your credit score points. The truth is that every lender has a different formula to weigh each considered area; however, we do know what those essential areas are, and we can tell you how to build a credit report that will get you the financing you need.

You’re not only aiming to get financed but you want to get the lowest interest rates for your deal too.

Be a good citizen and build a healthy payment history

What do we know? Well, you need to start keeping an eye on your payments of current credits. Pay on time, pay the most you can (total amount if possible), and contact your lender to inform and deal with any late payment; finally, never fail to pay for an account, even if it’s in dispute.

Good payment history shows how much committed you are to settle your debts on time. Any lender likes to see that in somebody asking to borrow money.

It’s not your credit card but your available credit.

Is your credit card the only available credit you have? People forget to account for their loans and lines of credit as part of their available credit, which is the one considered for your report. It’s a good start trying to manage your credit card more responsibly than when you were in your 20s, but it’s not enough; you really must show that you are not using too much of all your available credit.

The Financial Consumer Agency of Canada recommends not using more than 35% of your entire available credit. Keeping a credit card usage limit is just one step; you must apply the same approach to any loan or approved line of credit, so don’t use them to the limit.

On the other hand, diversify your credit.

A good credit score will likely include credit cards, a mortgage, a car loan, and others in between; that shows that you’re a subject of credit and that, since you’ll be paying them responsibly, you’re not exceeding your debt capacity. Just don’t apply to all of them at once.

Keep your credit checks on a leash.

There is a record generated every time somebody asks for your credit report. Credit card and loan applications are not the only ones accounted for; your credit checks will also show those rental and job applications that required a credit report.

Having too many requests could give the lender the wrong message. Try to limit your credit applications, spread them through in more extended periods, and most of all, ask yourself whether you need that credit before applying to it.