Here's where Canadians are living abroad: report
A recent report sheds light on Canadians living abroad--estimated at around four million people in 2016—and the public policies that impact them.
Thirty years ago, a large percentage of the population didn’t care about their credit. The only reason credit was important was if you were getting a mortgage on a home or financing a new vehicle.
Even then, the information on your credit report was limited and lenders had to rely more on your income history than your credit history.
Now, it seems like you need credit for everything, from renting an apartment to getting a cell phone or even qualifying for student loans. As we’ve become more dependent on credit, a lot of myths have arisen around credit building and credit scores.
Below, I’ll debunk some of the most prevalent credit score myths and explain the real truth, so you can start improving your score.
How many times have you heard somebody tell you that credit cards are bad? I’ve heard it a lot, mostly from individuals who feel credit card companies have burned them.
In reality, credit cards can be one of the best ways to build your credit score. The key is to use them wisely.
If you use a credit card the wrong way and don’t understand how credit card interest works, they can quickly send your credit into a downward spiral.
Here’s what using a credit card the “right way” looks like:
A good rewards credit card can actually help put money back in your pocket by helping you earn cash back on everyday expenses and allowing you to accumulate points that can be redeemed for travel, vacation, and other rewards.
Contrary to popular belief, checking your credit score will never hurt your score. In fact, you can check your credit report for free from Canada’s two major credit bureaus - Equifax and Trans Union.
What can hurt your credit is applying for new lines of credit, as this initiates what’s called a “hard credit check.”
This typically isn’t anything to worry about if you’re only doing it periodically - maybe once or twice a year. However, if you’re constantly initiating hard credit checks and seeking out new credit, it can decrease your score and flag you as a high-risk borrower, as it makes you appear more desperate.
All debt isn’t bad debt. In fact, your credit diversity, which is how many varieties of credit you have in your name, is actually a key factor in determining your overall credit score.
A diverse credit profile could look like this:
The key here is that you remain in good standing with all of your lines of credit. Creditors and lenders like to see individuals who are responsible borrowers. Not having enough lines of credit can make you appear inexperienced to lenders and can actually lower your score.
Just because you start earning more doesn’t mean your credit will go up. I’ve met individuals who are millionaires on paper, but who have rock-bottom credit because of poor financial decisions in their past.
That being said, earning more money can help you improve your credit, as it gives you more money that you can use to settle past debts, catch up on payments, and begin building a positive payment history again.
You don’t need to carry over a balance on your credit card to build good credit. It is a good idea to use your credit cards and pay them off, as this builds payment history. If there’s nothing to pay off on your credit card, then you won’t have a payment history.
However, it’s in your best interest to pay your card off before the end of each billing cycle, as this generates a timely credit payment report and prevents interest charges and late fees from accumulating on top of your balance.
Just because you have a 750 credit score doesn’t mean that you can walk into a car dealership and finance the most expensive car on the lot or get approved for a $25,000 credit card.
That’s simply not how it works.
Before giving you a line of credit or approving you for a loan, lenders will also look at your current income and your income-to-debt ratio.
If your income doesn’t show that you can comfortably afford to pay back the amount financed, having a great credit score won’t help you. That being said, having a good credit score can definitely help you secure more favourable loan terms (for example, lower interest rates), if you have the money to back it up.
It’s important to stay on top of your credit and treat it responsibly. If you make the wrong choices, you could easily end up in a situation where you’ll spend years trying to rebuild your credit.
However, if you pay your bills on time and use credit responsibly, it will make your life a lot easier by helping you get approved for lower-interest financing, credit cards with great rewards programs, lower security deposits and other benefits.
Keep on reading for more tips on how to get out of debt quicker and start building your credit!
A recent report sheds light on Canadians living abroad--estimated at around four million people in 2016—and the public policies that impact them.
Polish President Andrzej Duda says while no decision has been made around whether Poland will host nuclear weapons as part of an expansion of the NATO alliance’s nuclear sharing program, his country is willing and prepared to do so.
Harvey Weinstein’s lawyer said Saturday that the onetime movie mogul has been hospitalized for a battery of tests after his return to New York City following an appeals court ruling nullifying his 2020 rape conviction.
One person was killed in a six-vehicle crash on Highway 400 in Innisfil Friday evening.
Ontario is now home to an invasive and toxic worm species that can grow up to three feet long and can be dangerous to small animals and pets.
A number of LGBQT+2s groups in Central Alberta are pushing back against a request from the Red Deer South UCP constituency to reinstate MLA Jennifer Johnson into the UCP caucus.
It's one thing to say you like Taylor Swift and her music, but don't blame CNN's AJ Willingham's when she says she just 'doesn't get' the global phenomenon.
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
A girl and a boy, both 14 years old, made their first appearance today in a Halifax courtroom, where they each face a second-degree murder charge in the stabbing death of a 16-year-old high school student.
As if a 4-0 Edmonton Oilers lead in Game 1 of their playoff series with the Los Angeles Kings wasn't good enough, what was announced at Rogers Place during the next TV timeout nearly blew the roof off the downtown arena.
Mounties in Nanaimo, B.C., say two late-night revellers are lucky their allegedly drunken antics weren't reported to police after security cameras captured the men trying to steal a heavy sign from a downtown business.
A property tax bill is perplexing a small townhouse community in Fergus, Ont.
When identical twin sisters Kim and Michelle Krezonoski were invited to compete against some of the world’s most elite female runners at last week’s Boston Marathon, they were in disbelief.
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
A local Oilers fan is hoping to see his team cut through the postseason, so he can cut his hair.
A family from Laval, Que. is looking for answers... and their father's body. He died on vacation in Cuba and authorities sent someone else's body back to Canada.
A former educational assistant is calling attention to the rising violence in Alberta's classrooms.
The federal government says its plan to increase taxes on capital gains is aimed at wealthy Canadians to achieve “tax fairness.”