Building credit score

[Canada Fan]

Hi, I left Canada back in 2004 after I got the citizenship to a gulf country. Back then I had few thousands in debts as student loans and some credit cards. I was paying online on time, then later had few financial issues and stopped and forgot totally about it later on. Then collection agencies started calling my friend's house and finally I paid off everything. Now I know very well that my credit score is very low because of the payments and the collection agencies.
I'm planning to go back very soon, and I need advice on how to rebuild my credit score as fast as possible otherwise I won't manage to get a mortgage for a house or even start my own business.

 

[steerpike]

It's been a long time and you did eventually pay off the debts, so i think your credit rating will be okay. The bank may ask you about it, but just explain what happened, and more importantly, explain that now you are in a much better financial state and will have no problem paying off the loans.

Fastest way to rebuild credit is to get a creditcard, and purchase EVERYTHING on it, and always pay it all off 100% every month (not even 1 day late).

Also, you should request your credit score, which you can get for free from equifax or transunion.

 

[Bargeld]

Get an unsecured card, get multiple if you can, make sure you pay them off entirely, and keep your utility below 30% (i.e. if the limit is $5000, keep the balance reported monthly below $1500).

The two biggest factors to credit score are on-time payments and utilization ratio (credit utility), so bear those in mind. From a creditor's perspective, your credit risk (ability to pay them back, fully, and in a timely fashion) is their prime concern. Not making payments on time means you are a huge risk. Having a high utilization ratio means if something happens you can be a risk of not paying. It's a sign to a creditor that either you need a higher limit, if you're paying it off (to keep the utilization ratio more under control), or that you're reckless with your expenses, and thus a risk.

This, to me, is just the more basic, essential advise for credit.