If you’ve ever dealt with a collections agency you know that you are considered guilty until you prove your innocence. I was reminded of this recently when I received a call from an agency. He was looking for a different Julie Broad but I was the first one on his list because he did a Google search for “Julie Broad” and I was a BC resident, I was all over the internet and my contact details were easy to find.
Years ago, I assume the same Julie Broad that this collections agency was after had found my address in a phone book and learned enough about me to send a collections agency and an angry landlord my way. Because these people had been directed my way they were a little harder to shake off. I was able to resolve the issue by signing some papers and showing some I.D. to prove I was not the “bad” Julie Broad.
This incident did not show up on my credit report, but it could have. And, I would have been responsible for clearing it off of my report. You see, it’s your responsibility to make sure your credit report is accurate, not the company that does the reporting.
So, have you checked your credit lately?
If you haven’t, you may even be like my Mom, and not even have a credit score at all. After years of putting everything through their business account or on my Dad’s account, she didn’t even exist to the credit rating agencies.
Or, you may discover that there are old credit card balances still showing on your report like I did. Or that you are showing as working at a company that you’ve never even applied to for a job!! It can be surprising what shows up on your credit report.
It’s really the one thing you must do as a real estate investor – check your credit now, and then again in 6 to 12 months. And, keep checking it!
You need to know what your credit score is, and you also should take steps to increase your score.
A higher credit score often gives you better access to credit, better rates and sometimes even more favourable loan terms. Even if you’re working with private lenders, a good credit score will help you secure better terms because you’ll be seen as a lower risk opportunity for their money.
So what can you do to increase your credit rating/score? Some of the most important things you can do are:
- ALWAYS pay at least your minimum balance every month on any loans, credit cards, lines of credit, etc.
- Don’t be a credit-seeker – this is someone who obtains new credit cards just for the “rewards” or constantly shops for the best mortgage rate (and has their credit checked by each lender along the way)
- Try not to use more than 75% of your available credit for an extended period of time
- Close unused credit card accounts, mainly ones that you haven’t used for a year or more and then ensure they show up as closed on your credit score (keep a copy of the notice that it’s been closed as you may have to fax that to the credit company)
- DO try to use your credit to establish a history of using and more importantly, paying off credit
- Check your credit at least once per year to make sure everything is as it should be
Even if you’ve never bought any property, or you don’t think you will be buying property in the near future you still should check your credit score!
Keeping a regular eye on your credit report can help you catch anomaly’s that could indicate your identity has been stolen, it can help you make changes to your report that will increase your score, and it will make you sound more knowledgeable and professional when you speak to mortgage brokers or banks if you have a good idea of what is on your credit report.
How to Check Your Credit in Canada
Equifax is the most common credit reporting agency used by Lenders in Canada and you can check your credit and your credit score online. All you need to do is register, answer a few questions to confirm it’s you who is requesting your score, pay a fee of approx. $24, and within seconds you’ll have your credit report and score. You can also print off a form on the website, or call or fax and request your credit report for FREE through the mail. However, this will ONLY show your report, not your score. But, it’s still beneficial to obtain your report, just to make sure everything is in order.
How to Check Your Credit in the U.S.
In the U.S., Equifax is also very common as is TransUnion and Experian. Although, Equifax tends to be used the most by lenders. Similar to in Canada, you can order your report online very quickly for a fee, or you can order it for FREE through the mail. Whichever way you choose to obtain your credit report and score, it is highly recommended to do this at least annually.
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