Your Credit is Sometimes More Important Than You Think

Your Credit is Sometimes More Important Than You Think

Written by Caitlin Wood
Last Updated November 17, 2017

You may think that your credit rating is only important when dealing with things like credit cards, mortgages, or student loans. Unfortunately, this is not the case. In reality your credit history can dictate the options that are available to concerning issues such as your job and where you live (along with your living conditions).

Learn how to check your credit score, here.

What Factors Affect my Credit Score?

In order to avoid a bad credit score it’s imperative that you know what factors affect the calculation of your credit score and how your financial habits affect it.

History of Payments 35%

A history of late or missed payments will greatly affect your credit score in a negative way.

Debts 30%

Carrying a lot of debt month to month will also negatively affect your credit score and overall financial health.

Credit Length 15%

Your financial health is evaluated over time. Therefore it’s important that you have credit accounts that have been open and active more a good period of time if you want a good credit score.

Diversity 10%

Having a variety of different credit accounts open will help improve your credit score.

New Inquiries 10%

Too many credit checks within a short period of time will have a negative effect on your credit score, because it can suggest that you’ve been refused credit too many times.

Learn how to increase your credit score quickly, click here.

What Kind of Information is Included in my Credit Report?

Your credit report will contain certain basic information such as your name, address, SIN, along with your current and past employers. However, it will also contain information about all your credit accounts and transactions, your cell phone and internet accounts, public/legal accounts, and credit requests.

Credit card companies and loan officers are not the only ones that could be looking at your credit rating when assessing you. Regrettably, many people do not realize this until it is too late. Even when you may want to do some good, your credit history may be checked. Credit reports are a common part of background checks, even when you’re applying to volunteering jobs. Here are some important instances in life where you credit history may be very important.

Confused about how to read your credit report? Read this article.

Applying For a Job

A company hiring manager may very likely take a look at your credit history. This is done because, to some degree, your credit history can be used as a reflection of your character, especially when it comes to your reliability and security.

A credit check from your employer is different than those from a credit card company. Your employer will first require your written consent to be able to see your credit report. They will also not be able to see your credit score.

You should also keep in mind that credit reports contain a lot of other data, so they can provide a wealth of knowledge to potential employers. The financial data that is provided on the reports is also valuable to employers if you are applying to a position that would involve you working with money or a position where you require a security clearance.

Looking for Insurance

Depending on the province, some insurance companies may review your credit history before they offer you a quote. They may want to determine the likelihood of you making your payments on time.

Setting up Your Utilities

Although heat, water, electricity, and of course internet are all considered necessities, the companies that provide such resources want to be assured that they will be paid. If you happen to have a poor credit history a utility company may require you to put down a deposit at the beginning to protect them from any losses. Once you’ve made a certain number of on-time payments, more often than not you will get your deposit back.

Purchasing a Phone

Having either an iPhone or a smartphone is considered the norm today; sometimes we forget how expensive these phones actually are. Your payment options for your cell phone may rely on your credit rating. Just like with utilities, starting your cell phone plan may require a deposit if your credit is not up to certain standards.

Being Eligible for Housing

Whether you’re paying a mortgage or even renting a home, your credit history is still very important. People tend to overlook the fact that a credit check is a common part of the tenant-screening process. Finding an affordable place to live in the right location can be difficult enough, let alone trying to secure an apartment when you have a bad credit history.

Building a Better Credit History

If past financial mistakes or maybe tough financial times have damaged your credit, there are many different things you can do to build a good credit history while you wait for your past credit issues to fade off your credit history.

It’s also good to keep in mind that sometimes inaccurate information can lead to a bad credit score.  For this reason, you should really monitor your credit reports for inaccuracies or identity theft. Even simple errors like a wrong address or a misspelled name could cause issues with your credit. Remember to consistently review your reports for accuracy to avoid any headaches in the future.

Looking for more information on credit improvement?


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Caitlin is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security. One of the main ways she’s built good financial habits is by budgeting and tracking her spending through the YNAB budgeting app. She also automates her savings so she never forgets to put aside a portion of her income into her TFSA. She believes investing and passive income is key to earning financial freedom. She also uses her Aeroplan TD credit card to collect Aeroplan points so that she can save money when she travels.

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