How often should I check my credit score?Īt Borrowell, two million users of the app can access their weekly-updated credit score, for free. (We’ll get to how to hack this, read on.) “If you go car shopping, for example, and you go to 10 dealerships in the process, and each and every one looks at your credit, you could lose a lot of points in a very short amount of time,” Ms. Johnson cites the kind of situation that caught up The Globe and Mail’s money expert, Rob Carrick, whose credit score took a hit – albeit temporarily – after he added a new credit card and bought a new car with dealer financing. One-off credit checks are of course inevitable, but there are certain situations where your credit may be checked often, all at once, and perhaps excessively. You already consented to their checking, by the way – it was right there in the fine print again. This includes the would-be employers and landlords mentioned above, and also the creditors, any and every time you apply for more credit or a new card. “Every time someone else looks at your credit bureau file, you lose points,” cautions Ms. “ Checking your score yourself does not affect the score, and in fact you should be checking your score,” she says. This is a very wrong, very pervasive rumour about credit scores, Ms. Then you’ll feel a material difference in your life.” “Going from an 800 to 850 won’t be drastic, but going from 550 to 700 is huge. “Lots of people get a bit obsessed with the difference between great and excellent, but that doesn’t make a major difference,” Ms. That said, don’t get too preoccupied over a few points. Finally, 300-579 is “poor,” where multiple defaulted loans mean you’ll have a hard time getting credit without paying a high interest rate – often 20 per cent and more.580-669 is “fair,” but below the national average, and you’re likely ineligible for the best credit rates and cashback credit cards.670-739 is “good,” so while you’ll still qualify for most loans, you’ll probably pay a slightly higher interest rate.740-799 is “very good,” meaning you likely have a few late payments on file but will still qualify for most premium credit cards.Anything above 800 is “excellent” and you will have no issues being approved for loans at the lowest available rates.(Provincial laws determine who can access your credit score without permission – in B.C., for example, all three levels of government can – and judges and police often can too, along with the Canada Revenue Agency in some circumstances.) “When you apply for a job, a lot of applications have little tiny writing at the bottom that says you authorize them to do a credit check,” Ms. (You can refuse, but then you probably won’t work or live there. A few examples include a landlord who is considering you as tenant, a car salesman about to offer you a lease, even a would-be employer wondering whether you’ll be a reliable addition to the team.Īll of the above must ask for your permission. “There are so many situations where people want to know your credit score before they offer you a service or product, and at what interest rate,” Ms. “Your credit score is really a measure of your financial reputation,” explains Eva Wong, co-founder and chief operating officer of Borrowell, a credit score monitoring app and credit education company. It matters if you are trying to take out a loan, of course, but even if you’re not, it matters in ways you might not realize. Your credit score is just that: an actual score between 300 (“poor”) and 900 (“excellent”) that uses your credit history, payment information and other factors to measure your supposed “creditworthiness” – the likelihood that you’ll handle a loan responsibly and repay the debt on time. “The credit bureaus just pull information from your bank, crunch you through the algorithm, and give your three-digit number.” “Once everything was going digital and the internet started to be a trove of information, for better or worse, the bureaus decided a much easier way to do this was just go online,” Ms. There, a banker would check your accounts, look you up and down, and decide whether you were qualified for a loan – and for how much.Īs you might imagine, the human insight system was rife with human error – the official reason the financial world adopted the now-ubiquitous credit score, though no doubt ease and efficiency factored heavily. Once upon a time, not too long ago but also a lifetime ago, borrowing money mostly went like this: “You’d put on a suit, go into the bank and fill in a loan application,” recalls Margaret Johnson, credit counsellor and president of Solutions Credit Counselling Service Inc.
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