For many international visitors and immigrants‚ and young Canadians‚ a “credit score” is a foreign topic and one we often prefer to deal with later. However‚ the simple approach to getting a good credit score is to be on top of your finances. Think long-term. This is the second ingredient in financial health. Do you see yourself owning a home or car‚ having a family‚ or travelling around the world in the next ten to twenty years?
The decisions you make today will affect those of tomorrow. It is difficult to keep on top of our finances sometimes‚ especially if you are dealing with cultural adjustments‚ trying to find friends‚ or looking for a new job‚ but don’t let your credit slip away‚ because it will come back to bite you later. In North America‚ most people have some sort of line of credit‚ and unfortunately‚ there is a rising trend of credit debt in Canada‚ so don’t fall into this trap.
WHAT IS A CREDIT SCORE?
A credit score is a numerical assessment of how “credit-worthy" a person is and indicates how responsible (or not) you have been with money and debt in your past. For example‚ if you are always late on your credit card payments‚ or always max-out your limits—to “max-out” means to use all the credit available to you—then you will most likely have a poor credit score. If you always pay your bills on time and don’t have any debts‚ then you will have a better credit score rating.
WHY IS A GOOD CREDIT SCORE IMPORTANT?
A good credit score is not just important for major purchases‚ like when you buy a car or a house; a good credit score might get you better interest rates or give you a better chance of the bank being willing to give you a mortgage. A good score is important even when renting an apartment or signing up for a cell phone plan. Banks and credit unions will also check your credit score when you open a bank account; a good credit score can give you benefits‚ like more flexibility with newly deposited funds.
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In Canada‚ you can request a free report through Equifax (but to get your actual score‚ you must pay a fee). Equifax’s database consists of about 24 million Canadians‚ and they track all kinds of debt‚ including lines of credit‚ bank loans‚ credit cards‚ car loans‚ mobile phone bills‚ and mortgages. This is a sample credit score report and some Canadian statistics. www.equifax.ca
Leat Ahrony was raised in Taiwan and received a North American and international education. She has a Bachelor of Commerce in Sustainable Business and Community Engagement from the University of Victoria’s Business program.
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