Thursday, 15 December 2016

Good Credit: How to get it, not sweat it

Everyone knows that having a good credit score can increase your chances of getting car loans, better mortgage rates and so on, but a good score can also lead to better insurance rates! More and more insurance companies (about 55%) are using your credit score to determine your discount eligibility.

Did you know?
There is a statistical correlation between poor credit and more insurance claims.

So how do you get good credit?

A credit score is simply a measure of financial health. Here are some steps to take:

     Step 1: 
Check your credit score. The range in Canada is between 300-900 and the higher your number, the better your score is.  You can access your credit file for free by mailing in the form here. Or, you can access it online faster for a fee.

Step 2:
Understand your credit rating. Once you have received your credit report, use the following chart to help you determine your rating. The numbers are not a scale, but a current status: 

Step 3:
Correct any mistakes on your credit report. This might be mistakes in personal info, late payments, or signs of theft. Do you see something reported that is inaccurate? Gather proof (statements, receipts, etc.) and contact Equifax Canada or TransUnion Canada. They will check with the lender that reported the error. If that didn’t work, contact the lender yourself to speed things up. 

Still no results? Escalate your case by speaking to someone at a higher level within your lender or credit agency. Your credit isn’t affected when you ask for information about your own score. 

Step 4:
Make your credit card, phone bills, loan and lease payments on time. 35% of your credit score is based on payment history. If possible, set up automatic payments for the minimum so you don’t even have to think about it! 

More tips:

  • Don’t get enticed by those store credit cards offering a discount for signing up. They’re viewed negatively by credit bureaus.
  • You may have a low score simply because you don’t have a credit history. You can build history when you get a cell phone, bank account, car loan, or credit card. Don’t get it all in the same month, however, because your credit takes a small hit every time a lender checks it.
  • Do you have a low-interest card you don’t use? Keep the account open. It may help to improve a low score. 
  • Pay down your debts as quickly as possible. Pay down the debt with the highest interest rate first to save money. 

Don’t sweat it. See below for some safe, reliable resources if you want financial advice or simply want to take more control.

Debt and credit advice:

Budget templates, calculators, info on mortgages, credit, loans and more:  

Marchella Mafrica
Communications Specialist
Sharp Insurance 


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