Tuesday, February 23, 2016

What You Should Know About Credit Score and Your Financial Health

Do you know what your credit score is? Do you know what is on your credit report?

You should because your credit score is really important for your financial health. It can help you get approved for a mortgage, credit cards or other loans. It can also affect your ability to rent housing or get hired for a job.

What is your credit report?

It is a record of your past and present use of credit cards and loans. Mobile phone and Internet accounts may be included, even though they are not credit accounts. It includes details about your bill payments and your personal information. The two major credit reporting agencies that keep your information on file are Equifax Canada and TransUnion Canada.

Consistently, we come across credit reports in the course of our business and rarely do the borrower/mortgagor/tenant know what to expect. They might not know how missing a few payments a couple years ago or closing down those credit cards and lines of credit recently can affect your score. With the increase in cyber crime, idenity theft is also rising. One of us has been a victim of identity theft, and let us tell you, its not fun to deal with. Here is a list of what you should know to protect yourself.

How often should I check my credit?

A rule of thumb is to order a credit check every 12 months.

What can you do if you find errors?

You have the right to dispute any information in your credit report that you believe is wrong. You can ask the credit reporting agencies to correct errors. It’s free.

Why it is important to check for errors?

Errors can give lenders the wrong impression. You could be turned down for a credit application or be charged a higher interest rate.

Errors can also be a sign that someone is trying to steal your identity and open credit cards, mortgages or other loans under your name.

What errors should I watch out for?

Order your credit report from both Equifax Canada and TransUnion Canada. They may have different information about you.

Check for the following:
  • mistakes in personal information, such as wrong mailing addresses or incorrect date of birth
  • errors in credit card and loan accounts, such as a payment you made on time that is shown as late
  • negative information about your accounts that is still listed after the maximum number of years it’s allowed to stay on your report
  • signs of identity theft, such as credit cards or loans listed that you never opened yourself.
What cannot be changed?

You cannot change factual, accurate information related to a credit account. For example, if you missed payments on a loan or a credit card, paying the debt in full or closing the account will not remove the negative history.

Negative information will only be removed after a certain amount of time. The specific time period depends on the type of information and the province or territory where you live. For most information, the maximum is six or seven years.

Have you ever had any issues with credit reports?

Russel Lalovich
Office: (519) 966-0444
Cell: (519) 995-5620

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