Protect Your Credit
In our previous article, we asked this question:
A recent BMO study revealed that what percentage of Canadians always buy medical insurance before traveling?
Answer: 42% of Canadians remain confident that they could cover all their medical costs if they required it while abroad? despite the known fact that medical treatment could cost upwards of tens of thousands of dollars. Why take that risk?
Did you get it?
Now for this post?s question!
What percentage of Canadians share a credit score of between 750-799, as reported by TransUnion?
We?ll reveal the answer in our next post!
What?s your score?
No, we don?t mean in hockey, or a board game. We?re talking something much more important?your credit score.
Look, we know that doesn?t sound as exciting as the score in a sports game, but the truth is that your credit score can be a lifeline in the future? or it can be something that prevents you from living life to the fullest.
Having a good credit rating means that you can access credit when you need it, and also ensure lower interest rates on loans?and maybe even insurance premiums! Without credit, or with compromised credit, you may be viewed as a risk and denied access to credit or other opportunities.
So, how can you protect your credit score? Or maybe even improve it? There is a way!
Use the Cards Wisely
Some of the best ways to protect your credit or improve your score center around those little plastic rectangles we all love?credit cards!
First, make sure that you pay off those cards early. Try to make payments up to a week before they?re due, so that the balance is reduced or paid off entirely, doing everything in your power to avoid late payments.
Second, use your oldest cards when you can, because these are the cards that will give you a solid credit history for review?when you stop using them, their history disappears from your credit rating. Do you have cards that you?re not using? Get rid of them! Destroy those letters that say you?ve been pre-approved for a new credit card?especially if you have a short credit history. The fewer, the better.
Finally, don?t max out your cards! It should go without saying, but it?s easy to forget your limit and spend, spend, spend. Be aware of your limit, and stay away from it?the larger the gap between your balance and your limit, the better. And when the bills come, pay down those cards where you?re closer to the limit, first.
Take Everything Into Account
It?s not just credit cards that affect your credit rating?even paying bills late or on time will have an impact. Set up reminders in your calendar to pay on time, because bills that go to collections can stay on your record for seven years.
If you have outstanding items that need to be taken care of, make an action plan to do so as soon as possible. Ignoring late payments or scary collections letters isn?t going to make them go away?the only thing that will fix your credit score is you taking action.
How can you figure out what your score is? It?s actually very easy?you can obtain your credit score online through www.equifax.ca or www.transunion.ca, but be sure to limit these searches and limit the amount of time you spend searching for credit in the future. It can actually impact your score!
Know Your Score, Make a Change!
Your credit score is represented numerically, so if you?ve looked it up and are uncertain as to what the number means, use this simple guideline: The number will be between 300 (poor) and 900 (excellent). Wherever you fall on that scale will indicate how good or bad your current credit score happens to be.
And when you do check, you have a right to ensure that any negative items over seven years old on the history are removed?and once you?ve taken care of any outstanding items, such as debt, go ahead and ask for it to be removed as well.
It takes work and conscious effort, but protecting and improving your credit can be done.
And when your score isgood? If you?d like to know whether your good credit history entitles you to lower insurance premiums, just call your Staebler broker?they?ll be happy to look into it for you and answer any questions you might have!