Spring Cleaning Your Credit
As the warmer weather approaches, many Canadians are thinking about taking on new debt to buy a car, home or renovate.
But you don’t want to be sitting across from your banker or car dealer and hear the word declined because your credit is less than stellar.
If you’re like most people, you’ve likely never checked your credit before. But a low score can cost you more than just a “no” when applying for credit. It can potentially cost you thousands of dollars because of higher interest rates. The better your score, the better chance a lender will say yes – but it also puts you in the driver’s seat to negotiate a better interest rate. Not just on loans and lines of credit, but also on laptop leases, getting a new cell phone plan, your car insurance rates and more.
There’s a few ways to find your score today.
- Sign into your online banking. Look for one of the pull down tabs and you may see an option to check your score for free. Not all banks offer this, but many do. Check with your credit card company as well.
- Free services. There’s a number of companies like Credit Karma that offer free credit scores and reports. But remember the first rule of economics – there are no free lunches. The trade off for their gift is signing you up to their newsletter in hopes you’ll take advantage of their offerings.
- Lastly, you can go right to the source. There’s two credit reporting agencies in Canada: Equifax and TransUnion. In Canada, you can request a free credit report as often as you like. If you live in a major centre like Toronto where they have an office, you can stop by and get your report in person pretty easily. However, if you’re requesting your report by mail, you now have to send a bunch of sensitive documents proving it’s you, like a copy of your driver’s license or passport. If you’re going to do that, you should be sending it registered mail. With the cost of that process, you might as well hop online and just pay for the service. Plus, when you request your free report, you only get that – not your score. When you go online, you can pay for your report and receive it instantly (around $16), or, you can get your score and report for a bit more (around $22).
Check back shortly for my blogs on how to check your report and score for the first time. And, how to improve your score if it’s in the credit basement and needs to be brought up.
And for more tips on spring cleaning your finances, check out my recent interview on Breakfast TV Calgary.