A credit card is an essential tool in your financial wellness toolkit
When used effectively, a credit card can play an important role in financial well-being.
"How is your credit?"
Why is a Credit Score Important?
It could save (or cost) you thousands of dollars.
What is a Credit Score?
- Your track record for repaying your loans and credit card balances
- How much money you currently owe on your credit accounts
- How long your accounts have been open
- The different types of credit you use or credit mix
- How much credit you use compared to the amount of credit you have available
- How often, and how recently you have applied for credit
You can build a better and stronger credit score
- Be punctual. Never be late. Make every single payment on time. Even if you can’t pay your credit card off in full, at least make the minimum payment. Late and missed payments, as well as collections, will have a huge impact on your credit score.
- Make living within your means a lifestyle choice. Pay off your credit card in full every month. Credit card debit is one of the more expensive debt vehicles. Black is the new black. If you do maintain a balance (lots of us do), keep your account balances below 35% of your available credit. For instance, if you have a credit card with a $1,000 limit, you should try to keep the outstanding balance below $350.
- Get the right mix. Have access to multiple, yet reasonable, credit products. Having too high or too low of a credit limit will harm your score. If your revolving credit products are maxed out, that will have a negative impact on your score as well.
- Don’t apply for credit too often. Having multiple “hard” inquiries on your credit file will damage your score. Other inquiries, for instance for employment or insurance, have little or no impact on your score.
- Check your credit report regularly. Fix any inaccuracies that may harm your credit health. If you find an inaccuracy on your credit report, you can contact the creditor associated with the account or the credit reporting agencies to correct it.
Boost your financial know-how
Check out our Financial Literacy Hub for helpful tips, articles and resources.
Crash Course on Credit Cards
Before your first-year university student even unpacks, he or she may be offered two or three credit cards. That’s why it’s so important to home school your children in Credit 101 and give them ground rules for using credit before they even leave home.
The Keys to Financial Freedom
Are you living paycheque to paycheque, looking to put some money away in a savings account? Or maybe you’ve got some money saved up, but have no idea what to do with it. If you are ready to improve your financial situation, here are simple and easy steps you can take in order to get to where you want to be financially.
The Credit Book
Before making a decision to use credit, there are certain facts you should know – both in regard to your own financial position and about the types of credit available to you. This booklet will help you make better, brighter, more informed credit choices.