Worried about your credit rating? Avoid these 5 credit card mistakes + MORE Oct 26th

You’ve never missed the rent or been hounded by collection agents, so surely you’ve got stellar credit, right? Not necessarily.

There’s more to a good credit rating than simply paying the bills on time, explains debt counsellor Brian Betz of Money Mentors, a non-profit credit agency in Calgary. While payment history counts for 35% of your score, which is calculated within a range of 300 to 900, the other determining factors break down as follows (and you’ll find more detail below):

30% credit utilization
15% length of credit history
10% the number of credit inquiries on your report
10% the types and variety of credit you have

A score of 800 or more is excellent, 720 to 799 very good, 650 to 719 good, and 600 to 649 fair. If your credit rating is between 300 and 599, lenders will consider you a poor bet.

Being on top of the lesser known elements of credit can help you avoid nasty surprises, like being declined for a car loan or mortgage, or not qualifying for the best rates because of so-so credit…

You don’t think about your credit rating opening doors for you—until it abruptly swings one shut. However, in order to appreciate what you could do differently to improve your credit rating, it helps to understand what exactly that is.

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Conventional wisdom may lead you to believe that if you have bad credit, you should swear off credit cards. However, if you want to improve your credit score, you’ll have to prove you can handle credit responsibly, and one way to do that is—you guessed it—to have a credit card. When used responsibly, having and using a credit card can actually be a helpful tool to assist in rebuilding bad credit. While a low credit score might limit which credit card you can qualify for, luckily, there are a whole host of products catered to people in this situation. These cards often come with higher interest rates and lower spending limits; however, they can be a good starting point to re-establishing a respectable credit score. This in turn will help you get approved down the line for loans, a line of credit or even a mortgage. Some of these cards even earn you rewards, too.

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