CBC posted a video today following an investigation on how Credit reporting errors have been costing Canadians sometimes thousands of dollars because of errors in their credit report.
The results of this investigation are really no surprise to me. As a mortgage broker I see credit reports on a daily basis and I also see errors all the time.
The CBC investigative report is below followed by a video I did on how to obtain your own credit report.
I can’t stress enough that Canadians should know their own credit by checking their credit bureau at least once a year. Checking your own credit report DOES NOT affect your score and this can be done for free by faxing or mailing a Credit Request Form from the bottom of this post to Equifax.
Once you have obtained your report if you have any questions, contact me anytime. I’m always available to explain your credit report.
Here are some tips that will help keep your credit score tip top:
1. Know your score. The score range in Canada is 300 to 900 – the higher the better – and reflects a person’s credit history over the past six years. Only 5 per cent of Canadians have a score of 850 or better. Checking your score periodically can alert you to mistakes as well as credit fraud.
2. Pay your bills on time. Making a credit card payment even one day late will hurt your score. If you’re paying online, send the payment at least three banking days before it’s due to allow enough time for the transaction to be processed. Setting up a small automatic payment to your card issuer each month will ensure you never forget to pay at least the minimum.
3. Never exceed your credit limit. If you’re close to being maxed out, make sure you pay more than the minimum or the interest due could push you over your limit. Going even $5 over your limit could lead to a costly fee from your credit card company and will hurt your score each month it happens.
4. Don’t apply for store credit cards. Even if you’re just after a one-time discount for signing up, these cards, with interest rates as high as 29 per cent, and if you carry a balance can drag down your score.
5. Spread out your spending. The percentage of available credit you’re using each month affects your score, so it’s better to have two charge cards at 50-per-cent capacity each than one that is maxed out.
6. Beware of closing accounts. Even if you’re in a dispute with a lender, make your payments. A missed payment will show up on your credit report, can really hurt your score and is very hard to fix. When closing an account, get it in writing that it was closed with a zero balance.
7. Don’t close unused credit cards. If you have a low-interest card you don’t use, keep it open and use it periodically. Having a zero-balance credit card actually helps to improve a low score.
8. Don’t apply for too much credit at once. Don’t lease a car, sign up for a new cellphone and apply for a loan all in the same month or two. The credit bureau sees this as a sign of financial trouble. Beware, also, of being pre-approved by several lenders before you’re ready to buy. Although you can check your own credit rating without penalty, pre-approvals from lenders count against your score.