We Canadians focus on high school grades to try to get into a great college or university. And when it’s all done, the next and most important grade we get is our credit score. This is your 3-digit score that signifies whether you have good or bad credit. This score ultimately defines your financial life!
That’s why we're sharing the top 10 things you must absolutely know about your credit. These are things to know about credit because they will drastically change the trajectory of your financial health.
The first thing lenders and creditors do before they decide to give you any money are that they to check your credit history. To get approved for any loan amount, you need to make sure to stay on top of your credit score before applying for any credit. It's a good idea to get the latest copy of your credit report, which shows your major payment activities on your credit cards and loans. Your report will also show whether you have filed for a consumer proposal or bankruptcy. By federal law, you can request your free credit report once a year.
A poor credit score costs you a lot more money because lenders don’t trust you and view you as a credit risk. So, if you end up getting approved for any type of loan, it will come with higher interest rates, costing you a lot of money in interest. On the flip side, if you have a good credit score, you will be approved for a loan with lower interest rates, saving yourself a lot of money. So, don’t wait any longer—let's improve your credit score.
When you review your credit report, make sure to look at the details and check for any possible errors. Some of these mistakes could include late credit card payments or missed loan payments. You may even find accounts showing on your credit report that aren’t yours. When you find these errors, make sure to report them immediately and have them scrubbed from your credit report.
There are two types of credit checks. When an employer, landlord, select financial institution or insurance agency run a credit inquiry, this is called a soft credit check and it doesn't hurt your score. However, when you apply for a car loan or personal loan, a hard credit check is performed. This affects your score because it represents the number of times you have asked to borrow money. Learn more about the difference between a hard versus soft credit inquiry.
At some point in your life, when you apply for a job or an apartment, your credit is checked. Some employers will do a deeper check before hiring and look into your credit history; it depends on the employer and the type of job you’ll be doing. Employers must ask your permission before doing a credit check. If they decide not to hire you based on your credit, this information must be shared with you.
Landlords aren't required to get your permission before doing a credit check, but they do have to let you know if they are denying your application because of your credit.
If you don’t know your 3-digit credit score or simply haven’t checked it in a while, then you can check your credit score for free with us at Refresh Financial. You can check your own score at any time without impacting your credit, it’s called a ‘soft credit check’. Also, keep in mind that you get a copy of your free credit report annually. We really recommend that you do.
Yes, surprisingly, there are things that do not affect your credit score. Some of these include:
We talked about the main factors that affect your credit score, and those are very important to keep in mind. Here’s a summary of the top three areas you can focus on when building your credit score:
Once you have your credit building products we recommend that you invest in credit monitoring service. This will help you reach your credit goals faster and it will help you detect any identity theft so you can keep your personal information safe. Most credit monitoring services come with extra benefits and perks. Once you sign up with a Refresh credit building product, you can try a 30-day free trial of Refresh Financial's credit monitoring services and get serious about taking control of your credit score.
Now that you are aware of the 10 things you must absolutely know about your credit you can start implementing them one at a time and get set on your road to saving and building wealth, not debt.
To continue to learn about managing your debt and credit score wisely, follow Refresh’s Financial Blog.
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Refresh financial offers custom credit building solutions to help you build your credit score FAST.
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