In a previous post I suggested getting and perusing a copy of our credit report to check for accuracy. Enquiries were made as to how to obtain the actual credit score.
Although by law everyone is allowed a free copy of their credit report once a year from Equifax.ca or TransUnion.ca, unfortunately these companies charge extra to get the credit score. For about $24 you can get a copy of your credit report and credit score combined.
Beware of some websites that claim to offer free credit scores. They may sell your contact information to online marketers of credit monitoring services. Also, read the agreement carefully to make sure you will not be automatically charged a monthly membership fee.
Read the fine print of any site that says “FREE.”
Your credit score is a complicated series of calculations based on your credit history. The final number will be somewhere between 300 and 850. The average credit score is about 650.
A score of 720 or higher is considered good, and most lenders will give you their best deals. One under 600 will leave little or no negotiating room, so it pays to do whatever you can to increase the credit score – paying on time, not going over the limit, not opening a lot of new accounts, keeping balances below the credit limit, etc.
Related: Best Balance Transfer Credit Cards
I previously mentioned closing any accounts that are not being used. To clarify, don’t close all your accounts. Keep at least one or two revolving credit accounts open (especially ones that have been open for a long time), and use them periodically.
Warning flags will be raised if someone over, say, thirty years of age has no credit record at all. One example is someone closing all their credit cards and then using the secondary card of a spouse for all purchases. This may make life easier, but the credit history will only be displayed on the spouse’s record.
On a personal note, my husband’s credit score was always higher than mine even though I take care of the family finances and pay the bills, and I’m clearly a better credit risk than he is. I was determined to find out why.
It turns out that when we applied for our first credit card, he became the primary cardholder and the secondary card had the same account number and his name on it also.
I subsequently received a card in my name with a different number, but this made his credit history longer than mine. I imagine it should have evened up by now. Perhaps, out of curiosity, when I get copies of our credit report next time I’ll pay the extra money to get the credit score as well.