Welcome to Limor TV the place to be to learn about money and get inspired to take small steps to improve your finances. I’m not a financial planner but I’ll show you what I’ve learned. In today’s episode I’m going to be explaining the credit score range and why you should be aiming high. Come on this will be elevating! What is a credit score? What’s it range? And why should I aim high? I actually didn’t even know what a credit score was until I went to purchase my very first home. Luckily I was financially responsible so my was ok, but because I didn’t know about it wasn’t able to do the proper maintenance. In Canada the credit score is also called beacon score or a credit report and credit report is essentially just a report card and how you’re doing in the eyes of money lenders.
It’s actually a numeric expression of how credit-worthy you actually are. it’s very important to monitor your credit and make sure that it’s doing well because if you want to rent or buy a home if you want to purchase the car get a loan or sometimes even get a job good credit is required. In Canada there are several different reporting agencies and the biggest one is called Equifax most lenders actually reach out to them to get your credit score. I personally use Equifax as well to see how I’m doing. You can actually pull your own credit you can just go online and from my experience you can either get it for free where you just see all the various line item and not the actual score or you can pay a nominal fee of less than $25, answer to a quick question and get the score right over to you. I know some people don’t want to borrow money or be in debt but you actually don’t have to be in debt in order to leverage credit. You just have to have credit available to you so let’s say they are using a credit card you can just spend on your credit card and then paid in full at the end of the month.
Basically you just have to prove that you’re responsible with the money that is allocated to you. I’ve heard it’s actually a really good idea to have at least two items on your credit report, so it can either be two credit cards or your credit card either a mortgage or car loan payment. Your score is actually a reflection of your overall financial behavior and a component that is being able to pay your money back. So I recommend that you pay your bills on time and that you don’t use all the available credit that there for you.
Your score ranges anywhere from 300 to 900 and the higher your score the better, and the better interest rate you qualify for. If your score is between 300 and 559 your score is considered poor. If it’s between 560 and 659 it’s fair. Between 660 and 724 is good. Between 725 and 759 is very good and if it’s above 750 it’s considered excellent. Now even if your’e not considering getting a loan or borrowing some money in the next little while where you did your credit score I still recommend that you go ahead and you pull your credit score. I’ve heard that there’s many instances where there’s actually errors. Maybe your name is spelled incorrectly or your address or a card that you paid off that actuality is not reflected appropriately there. So if you find an error in your report you can just send in some documentation and the error will be corrected.That brings me to today’s tweetable: Care about your credit before you need it so it’s a great shape when you do.
Here’s my challenge to you, I want you to go and pull your credit report if you’re not planning to make a significant purchase or need to borrow money in the next few years you can just take the free version and see how the various line items are doing. Or if you are planning to make a significant purchaser more money I highly recommend that you pay the nominal fee and actually get emailed it to you with the score. Once you pull your credit report take a look to make sure that there’s no errors there. If there are do whatever you need to do to get them corrected.
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Be proud that you’re learning and taking small steps to improve your finances, it will give you more and peace of mind. Thank you so much for watching and I’ll catch you next time on LimorTV. .
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