Credit
Does Credit Matters?
The short answer is Yes, credit does matter a lot do you.
Modern life makes it impossible to live without that little piece of plastic card. Buying online, booking tickets over
phone, renting a car, these are just a few obvious examples for our need of credit cards. Actually, you may or may not know, there are lots of people want to know your credit before dealing with you: banks, insurance companies, utilities companies, government agencies, revenue Canada, your employer, to name just a few.
Credit can be both good or bad to you. By using credit prudently, you can acquire assets right now without waiting to save until you have the money. It also offers you the convenience of shopping online, over the phone, or without carrying a lot of money in your purse. On the other hand, investors overuse on credit will end of with a large debt balance, and pay over 18% non-tax-deductible interest rate.
Forms of Credit
There are many ways you can obtain the credit from a financial institutions. The most common type of credit is credit card.
- Credit card
- Personal line of credit
- Home equity credit line
- Investment loans
Credit Report
Credit report is a history of past transaction on all the accounts you have opened. In Canada, there are two competing credit bureaus serving the individual consumers. They provide credit report and credit score (at a fee) upon the request of any lenders or consumers.
Equifax Canada
Personalized credit report & FICO® credit score and analysis $23.95 CDN
Online credit report $15.50 CDN
TransUnion of Canada
Online credit report $14.95 CDN
Add on personal credit score $7.95 CDN
Northern Credit
FICO score: credit scoring system name after Fair Isaacs Company, company who developed the system. It is a number between 300 to 900, the higher the bette.
Fixing your credit report
- Deal with mistakes - filing report immediately if you found the report is wrong due to minor errors such as mailing address, date of birth, wrong spelling etc.
- Negative information - If the negative report is wrong, contact your creditor and ask them to correct the report on your behalf.
- Request an investigation - you are entitled to appeal on any information you feel is incorrect.
