Your Debt Solutions Experts
BDO Vancouver

600 Cathedral Place
925 West Georgia Street
Vancouver, British Columbia
V6C 3L1
(604) 588-4275

Do You Know How to Improve Your Credit Score this Year?

Do you know your credit score?

You might have an idea, or you might be answering that question with old information that doesn’t reflect what’s really going on with your credit score now. And that could be a problem.

The truth is, only four out of 10 Canadians know their credit score, according to a Capital One study. In this podcast, our LITs have an honest discussion about how your financial behaviour could be bringing down your credit score. They also offer some advice and tips on how to improve your score, including checking your credit score and history regularly.

Here’s why checking your credit score is important

Checking your credit report is a good financial habit. It gives you the opportunity to see how you may be impacting your credit score negatively, like missing or being late on payments, or using a high amount of credit (aim for 30 per cent or less as your credit utilization ratio). Access your report at least once a year to see how you’ve handled your debt and make adjustments to improve your score going forward.

But what if you aren’t the one impacting your credit score negatively?

Have you ever heard of anyone being a victim of financial fraud? Do you know anyone who has had their credit card information stolen, or was a victim of identity theft?

These days, those risks are real, and the occurrence of financial fraud is frequent. Yet, according to the Capital One study, only 20 per cent of Canadians are checking their credit reports regularly to catch suspicious activity. And that means that 80 per cent are at a higher risk of being victims of identity theft and not knowing it.

That would spell big trouble for your credit score (not to mention your own sense of wellbeing and security). You could be on the hook for a lot of consumer debt if someone has your financial or personal information. And even though it isn’t your fault, you could suffer from a poor credit score for years.

The 2017 Equifax breach in the United States (and to a lesser extent, in Canada) threw a lot of people for a loop, and it’s proof that no one is totally safe from fraud or stolen information, even the companies we trust to protect it.

Here’s what can you do to protect your credit score

  • If you see any activity on your credit cards or on your credit history that doesn’t seem right, contact someone immediately. Reach out to your lenders and have them freeze the accounts so that no further harm can be done while you sort out the activity.
  • Take advantage of the free credit report you can get once a year from TransUnion or Equifax.
  • At any time, if you’re worried about your credit score or suspect fraud, talk to your bank or another service provider like Borrowell or Credit Karma to get a copy of your report without paying. But if it comes down to it, paying for another report and catching fraudulent activity is well worth the money.

Checking your credit score and credit report regularly can influence (and even improve) how you manage your finances. And it will also reduce the risk that anyone else is impacting your score without your consent.

Yes, missing a payment or two can impact your score! Barry Choi writes about his experience missing a credit card payment, and the consequences you could face in his article for MoneySense.

Do you check your credit report regularly? Tell us on Twitter. #CreditScore #Debt #MoneyManagement



Book a Free Consultation