Do you know how to check your credit score? If you are like most Canadians, you are probably unaware of what your score is. In fact, you may not even have taken a glance at your report in a long time, which is certainly not something to be proud of, especially in this day and age of identity theft. In order to have access to the best credit products and great rates, it is imperative to know what is hiding in your report and what your number is – it’s what smart consumers do!
The modern economy lives on credit, from the local mom and pop shop to the household with two cars in the driveway. Credit has become integral to the survival of the marketplace. Since you want to get the lowest cost possible for your credit endeavours, you need to have a good score and an impeccable report. The only way to do this is to be a responsible consumer and use debt the smart way. Otherwise, you will be stuck paying more for credit at a time when it is incredibly cheap.
This credit score journey begins with knowledge. Here is all you need to know about how to check credit score:
What is a Credit Score?
A credit score is a number that immediately identifies a person’s creditworthiness. The credit score is gathered using the consumer’s credit report, which is also compiled based on information from several credit bureaus. The standard range is anywhere from 300 to 850 – anything more than 800 is considered perfect. In Canada, the average credit score is 650.
How to Check Credit Score
If you want to check your credit score, there are two primary national credit bureaus in Canada: Equifax and TransUnion. But there are various services that you can access to gain free credit scores, including Borrowell, Credit Karma, Mogo, and Ratehub. Typically, you apply with these agencies and request a complete credit report, which can be done online.
Credit Monitoring Services
Is it worth the money to pay a monthly or annual fee to have a company monitor your credit score?
That depends on what you find in your report and score. If you are repeatedly coming across blemishes on your file that you did not cause and you need to take the time to correct every single one, then perhaps it would be an excellent investment to hire a credit monitoring service. It usually ranges between $10 and $15 a month.
On the other hand, if the errors are sporadic and you are not entrenched in credit markets, it may not be a necessary cost.
Factors in Determining the Credit Score
What does your credit score look like? Well, it really depends on several primary factors:
- Credit Account History: If you have an established credit account history, then you are a less risky borrower, so it is important to reconsider closing down accounts.
- Outstanding Debt: Experts say that debt balances over 50 percent of your credit limit will harm your credit score. If you need to be in debt, then your goal should be under 30 percent.
- Payment History: When you are making payments on time and covering the full amount, your credit score will ultimately receive a huge boost.
- Recent Inquiries: Some say this is true, while others say it is not. But we are putting it out there anyway: If a lender is checking your credit, it will identify as a hard inquiry for your credit file, which could impact your score. It is always better to limit your applications for new credit.
Indeed, there are many other elements for calculating your credit score, but these are the main ones to be become familiar with.
Errors in Your Credit Report
Millions of Canadians have come across a whole host of errors in their credit reports that that have impacted their scores. Everything from fraudulent cases to mistakes by administrators, it is important to identify these errors and then immediately correct them so you can get the best rates and terms possible. You do not want to be at a disadvantage because of something out of your control.
If you notice any errors after you checked your credit report, you should contact the credit agency and inform them of the error. Upon initial contact, you will be given a form and a list of what is needed to ensure everything happens as smoothly as possible. Ultimately, you will need to attach any documents to your submission in relation to the dispute.
The reporting agency will then contact the organisation that submitted the information you think is wrong.
Credit Repair Service
The consensus is that most consumers don’t have to hire a credit repair service to improve your credit score. While some companies will claim they can fix a poor rating or a disappointing report, they usually charge you hundreds of dollars without any results. The only way to attain a good score and report is to be a good consumer or correct the inaccuracies inside your report – and these do not cost you a nickel.
Tips to Improve Your Credit Score
If your credit score is low at the moment, just know this is only temporary. There are many financial resources and bad credit loans to help you through this period of time. In the end, your credit score is in your hands, so if you want a higher score then be sure to employ these measures to ensure you possess the highest score possible:
- Pay all of your bills on time and the total amount.
- Keep your credit card balances low and pay more than the minimum.
- Eliminate all of your debt as quickly as possible.
- Apply for new credit accounts only when you need them.
- Never close unused credit cards but don’t apply for unused credit cards.
When you incorporate these tips into your credit strategy, you will notice a huge difference the next time you check your credit score.