6-1 How to improve my JCIC Credit Score?
The JCIC Credit Score is calculated using the credit information within the disclosure period in the JCIC database. Key factors considered include payment history, amounts owed, length of credit history, and credit applications. Find out which factor affects your credit score the most, and make change to it, such as paying bills on time, keep balances low, and apply for new credit only when needed. Your credit score will improve gradually if you continue to rebuild your credit.
6-2 Will I have higher credit score if I don't interact with financial institutions?
No. Having no interaction with financial institutions leads to no credit history. And lack of credit information leads to no credit score. So, the better way to improve your credit score is to build and maintain a good credit history.
6-3 How long will it take for my credit score to improve after paying off debts?
The JCIC Credit Score reflects all of the credit information within the disclosure period in the JCIC database. After paying off debts, it will take a few days for the financial institution to report this information to the JCIC and we update it into the database. Besides, if there is any default record in your credit history within the disclosure period, credit score will still be affected by it, even the debt had been paid off. Finally, since the JCIC Credit Score is calculated based on the credit information within a period of time in the past, if you keep on paying bills on time, maintain positive interaction with your financial institutions, your credit score will gradually improve.
6-4 How long will my low credit score last?
The JCIC Credit Score is calculated at the moment of inquiry on the basis of the credit information within the disclosure period in the JCIC database. So if the data has expired or there are some changes in your credit records, your JCIC Credit Score will change accordingly. In other words, if your credit records have improved, your credit score will improve accordingly.
6-5 Will credit inquiries affect the JCIC Credit Score?
Credit inquiries made by financial institutions when opening a deposit account, applying a credit card, or reviewing the credit status of old customers, will not affect the JCIC Credit Score. Nor with you inquire about your own credit report.
The JCIC Credit Score only takes inquiries made by financial institutions when applying for new loans into account. If the customer has multiple inquiries for new loans, it usually indicates an urgent or abnormal need of funds. The reasons could be this customer cannot get enough money from old loans, or there are some risky factors that cause this customer to need new loans constantly. These kinds of situations can lead to bad credit, so the risk level will be reflected on his/her credit score.
On the other hand, considering that rate-shopping might also lead to multiple inquires, the JCIC Credit Scoring Model counts inquiries made within a 30-day time period as one inquiry.
6-6 How to improve my JCIC Credit Score fast?
The best way is to improve your payment history, and reduce the amounts owed. Since the JCIC Credit Score is calculated based on the credit information within a period of time in the past, you will need to pay your bills on time and wait for the negative records (if any) to pass. Having a good payment history is the basis to improve your credit score. Furthermore, try to reduce the debts, start from no-collateral loans, credit card cash advance, and revolving credit. These are considered higher risk, therefore they will have more impact on your credit score.
6-7 Will the number of credit cards affect my credit score?
No. Payment by credit card has become a primary way for purchases. According to our observation research, the number of credit cards one have has no significant impact on credit risk, so the number of credit cards won't affect one's JCIC Credit Score.
6-8 Does cancelling a credit card hurt my JCIC Credit Score?
Length of credit history is one of the factors the JCIC Credit Score takes into account. So cancelling a credit card might hurt your credit score, if the credit card is the oldest card you have. It is recommended that you keep the oldest credit card. Even so, compared to other factors, the impact on shortening your credit history is relatively small, it shouldn't have severe impact on your credit score.
6-9 Will a high credit card balance (installment plan included) affect my JCIC Credit Score?
Amounts owed is one of the factors the JCIC Credit Score takes into account. Having a high credit card balance leads to a high debt-to-limit ratio (Balance Due divided by Credit Limit), and high debt-to-limit ratio will lower your credit score. To avoid this, one can prepay part of the bill before bill closing date, which will lower your credit card balance.
6-10 Will using credit card installment plan affect my JCIC Credit Score?
There are three kinds of credit card installment plans: cash advance, billing ,and transaction. Among them, cash advance installments usually indicate an urgent need for funds,and billing installments are equivalent to loan and its risk is high ,which will affect your JCIC Credit Score.Transaction installments are considered normal consumer behavior and will not affect your JCIC Credit Score.