Why All Canadians Need to be Monitoring Their Credit Score
Loans Canada: The Country's Best Loan Comparison Platform
Do you know what your credit score is? When was the last time you checked?
You’ll want to know what your credit score is, especially if you plan on taking out some type of loan in the near future. Even if all you want to do is sign a cell phone contract or snag an apartment rental, you’ll want to make your credit score is in decent shape.
Trying to understand your credit score and credit rating? Read this.
Sub-par credit scores will make it pretty tough for you to get a mortgage, auto loan, personal loan, or any other type of loan. Lenders use credit scores to assess the likelihood of a borrower paying back a loan. A low credit score often means that borrowers have a shady payment history and lenders aren’t usually too keen on loaning out money to people who have trouble remembering to make their payments.
Click here to learn how your payment history affects your credit score.
Even if you do get approved for a loan with a poor credit score, you’ll most likely wind up with a higher interest rate.
Check it Once a Year
You won’t know what condition your credit score is in if you don’t check. Especially if it’s been over one year since you last checked, it’s time that you pull your credit score today. Things can change over the course of a few months and odds are your score is not the same today as it was the last time you looked.
You should also get a free annual copy of your credit report. Look here to find out how.
Here are some solid reasons why every Canadian consumer should keep tabs on their credit score regularly.
To Understand Where Your Score is at
It seems pretty simple and even obvious, but a good reason to check your credit score on a regular basis is to always be in-the-know about where you stand with your credit health. As we’ve already mentioned, your credit score is an essential part of your overall financial health. It won’t do your credit score much good if you just ignore it. In fact, it would be downright detrimental to your score if you neglected it for too long.
No matter what shape your score may be in, it is absolutely essential that you know what it is. If your score is high, great. If it’s not, at least you’ll know that you need to take steps to improve it.
If you’re looking to improve or fix your credit score, check this out.
Protect Against Identity Theft
Identity theft is rampant these days, especially as more and more personal information is being put out there on the internet for hackers to see. As of 2016, the rate of identity theft in Canada is 8.56 incidents per 100,000 residents. While that might not sound like a lot right off the bat, identity theft still has a serious effect on the lives of many Canadians every year, costing them millions of dollars. More specifically, more than $10 million dollars is lost from identity fraud every year.
Checking your credit score will give you some indication that something may not necessarily be right. Your report will outline any pertinent information that has to do with your credit history, including your account information, your payment history, and your personal information. If you pull your report and suddenly notice that your credit score has plummeted despite having a stellar payment history, this may be a red flag that’s something is wrong.
When you take a closer look, you just might notice that there is a mysterious credit card account on your credit report that you never took out with multiple missed payments on it. It’s highly possible that someone has been using your personal information and identity in order to take out a credit card and has been using it for spending sprees without you even knowing about it.
While being the target of identity theft is never fun and can have dire consequences on your financial health, there are things you can do about it to protect yourself going further and to erase any issues that such identity theft has caused.
There are credit monitoring services available that can provide you with some assistance in case something significant and inexplicable happens on your credit report. In this case, you will be notified as soon as possible. While this might not do much to prevent identity theft altogether, it is one step in the right direction and can be a good way to respond right away.
Make Sure Everything is Accurate
While mistakes on your credit report might not necessarily be a result of identity theft, they can still cause your score to dip without you knowing. You could be doing everything right with your finances, but mistakes on your credit report can pull your score down unfairly.
You can dispute any errors in your credit report. Click here to find out how.
By checking your credit score and looking over your report, you’ll have the opportunity to see if all information is accurate. Even just a glance at the score itself without even looking at the credit report may indicate that something is awry since your score is a reflection of the information in your report. If your score is lower than you think it should be, this may be a sign that there may be errors on your credit report that need to be investigated and fixed by the credit bureaus.
Find Out What is Affecting Your Score
If you keep tabs on your credit score, you’ll be better able to understand how any actions in the financial departments are affecting your credit. For instance, you’ll notice if your score changes after paying down a loan account in full or opening up a new credit card. By having a clear understanding of how specific actions impact your credit score, you will know what you should do or avoid before making any other major financial moves.
To discover the ways your credit accounts affect your credit score, look here.
Considering how important your credit score is to your overall financial health, it makes sense to monitor it on a regular basis rather than forgetting about it. Credit scores are likely to change regularly, especially when you make specific financial moves, such as missing a payment or repaying a debt in full. Knowing where you stand with your credit score will give you more insight into your finances and will tell you whether improvements need to be made in order to get your score in better shape.
Rating of 5/5 based on 2 votes.
Largest Lender Network In Canada
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
40 standout leaders in the Fintech space were awarded a Leaders in Lending Award by the Canadian Lenders Association.