When it comes to getting a mortgage, car loan, or other type of credit, your credit score is the most important deciding factor, and personal finance experts say it’s important to keep track of your score regularly. increase.
“This is very important. It’s a key indicator of how well someone manages their money. And that’s the biggest determining factor, how much interest they actually pay.” Whether you intend to finance a home, buy a car or even get a credit card,” mortgage broker Mary Sialtsis told CTV’s Your Morning on Wednesday.
Sialtsis said most lenders require a minimum credit score of 680 and two years of “good credit history,” meaning no late payments or credit limit violations.
Setting up automatic payments for your credit card is a great way to make sure you never miss a monthly payment.
“In today’s busy world, everyone is in a constant hurry and it’s very easy to miss the minimum payment date for your credit card.” Set it up so that if you don’t make a payment when it’s due, you’ll get an automatic minimum payment so you don’t fall behind.”
Sialtsis recommends staying below 50% of your credit card limit if possible and not closing old credit accounts even if you no longer use them.
“If someone starts closing all these different credit accounts, they’ll look at it and say, ‘Why are they closing them all? Don’t they trust themselves with this credit?’ “Again, your score is based in part on how well you manage your money. So why are you suddenly closing all these accounts? They might think you don’t trust yourself.”
Lenders typically want to see at least two different credit items, such as loans and credit cards. Some Canadians may think it’s financially wiser to stick to debit cards and not get a credit card to avoid debt, but this approach could one day help pay for car loans and mortgages. It can hurt your chances of qualifying, says Sialtsis.
“Even when you’re 18, get your first credit card, set a $500 cap, and use it responsibly. Learn how to use it, practice using it, because I “I don’t have a credit card, but that doesn’t help,” she said.
you can also Check your credit score for free Check your achievements via Equifax or TransUnion. Checking your credit score doesn’t affect your score, but if a lender pulls out your credit report, it usually drops your credit score by a few points.
See the full interview with Mary Sialtsis at the top of this article.
