Protecting your Reputation how they can work to avoid by Diditfit


									Protecting your Reputation:
                                                                                                                                                         Wednesday, February 20, 2008 • Page 14

Understand Your Credit Report and Credit Score
   An incredible array of       how they can work to avoid           A starting point is gaining    history to help predict how       credit cards, finance compa-        You can obtain a copy of
mortgages is now available      so-called “bruised credit” –      an understanding of the dif-      you might manage your             ny loans.                        your credit file free from
to Canadians, with more         people with a lower credit        ference between your credit       credit in the future. The            • Recent new credit.          Equifax (1-800-465-7166)
products and features being     score can find themselves         report and your credit score.     credit score used most often         Fortunately, there are a      and Trans Union (1-800-663-
introduced all the time.        paying a higher interest rate,    A credit report is a detailed     by Canadian lenders is the        number of steps that con-        9980). These free reports
What many prospective bor-      or even being denied access       history of how consistently       FICO score (developed by          sumers can take to keep their    will not contain a credit score
rowers don’t realize is that    to certain types of loans. The    you meet your financial obli-     the Fair Isaac Co.), which is     credit report and credit score   and it’s a good idea to get
the pricing of mortgages and    good news is that by taking a     gations and provides a pic-       a number between 300 and          healthy:                         both reports. You can order
other loans is based in part    few basic precautions,            ture of your financial health     900. The higher your score,          • Pay your debts on time –    more comprehensive reports
on your credit-worthiness,      prospective borrowers can         based on your past behav-         the more likely you are to be     always meet due dates. Do        including your credit score
says Eric Widdifield of Invis   protect their credit report and   iour. A credit score is an        approved for a mortgage and       not ignore unpaid bills.         online from these compa-
Inc.                            credit score, and increase        objective summary that            receive favourable rates             • Borrow only the amount      nies, for a fee (around $26).
   Consumers need to be         their access to better rates      translates personal informa-      because the lender considers      you can afford to repay.         A link to the Equifax online
aware of how their credit is    and a better choice of mort-      tion from your credit report      you to be a better credit risk.      • Numerous inquiries for      form is available at
evaluated by lenders, and       gage products.                    and other sources into a             Several factors are used by    your credit report can some-
                                                                  three-digit number represent-     the two credit agencies in        times worsen your score. If         For those with bruised
                                                                  ing your overall credit-wor-      Canada (Equifax Canada and        someone is seeking credit        credit, a mortgage broker can
                                                                  thiness.                          TransUnion Canada) to cal-        card debt, furniture and         coach you on the ins and outs
                                                                     Both your credit report        culate credit scores:             department store loans then      of improving your credit
                                                                  and score are important.             • Debt payment history.        their credit score will be       score over time – as your
                                                                  When deciding whether or             • Amounts owed com-            adversely            affected.   good credit history is estab-
                                                                  not to grant a mortgage loan,     pared to your current credit      However, multiple inquiries      lished, in due course your
                                                                  lenders refer to an applicant’s   limits with lenders.              within a 30-day period for       borrowing options will
                                                                  credit report and score, along       • How often you seek new       car or mortgage loans are        increase. If you wish to get a
                                                                  with a range of other factors     credit.                           ignored.                         mortgage while you work on
                                                                  such as income, employment           • Length of time you have         • Reviewing your own          bettering your score, a mort-
                                                                  history, and down payment         had credit accounts.              credit file regularly to stay    gage broker can also advise

                                                                  Remember to contribute to your RRSP
                                                                  size. Generally, a credit            • Type of credit, such as      informed about the details on    on how to get a mortgage
                                                                  score uses your past credit       car loans, lines of credit,       your file.                       despite bruised credit.

                                                                    “Take advantage of higher          “The RRSP contribution         way to save for your retire-     should use available cash to
                                                                  RRSP contribution limits in       limit has increased from          ment, education or home.         invest in an RRSP and bor-
                                                                  2007,” says Chartered             $18,000 for 2006 to $19,000       RRSPs are a particularly         row to make investments
                                                                  Accountant Don Carson,            for 2007 –with even further       attractive        investment     outside your RRSP. Any

             • Home • Apartment
                                                                  Senior           Manager,         increases scheduled for 2008      because contributions are tax    RRSP-related management

        • Business • Commercial Vehicle
                                                                  PricewaterhouseCoopers            and beyond. Contributing to       deductible (the higher your      fees are not deductible.
                                                                  LLP in Toronto.                   an RRSP is a tax-effective        marginal tax rate, the higher       “Further, if your taxable

               • Personal Vehicle
                                                                                                                                      your tax savings) and,           income is below the highest
                                                                                                                                      together with income earned      tax bracket, you should con-
                                                                                                   Call Eric                          in the RRSP, are not taxed       sider maximizing your
                                                                                                  Widdifield                          until withdrawn.                 RRSP contributions each

             347 Maidstone Ave., East
                                                                                                                                         “If you have unused 2007      year, but delay claiming the
                                                                                              519-776-1563                            contribution room, you have      amount as a deduction until a
                                                                                               or 818-7745
               Essex, ON N8M 2Y4
                                                                                                                                      until February 29, 2008 to       future year when your tax-
                                                                                                                                      make a contribution to your      able income will be in a

                Fax: 519-776-4451                                         Need a Mortgage?                                            RRSP that will be deductible     higher tax bracket,” suggests

                                                                                                                                      on your 2007 tax return. You     Carson. “This allows you to
                                                                                                                                      should also consider making      save tax on income that
                                                                           New Purchase/Renewal                                       RRSP contributions for 2008      would have been subject to a
                                                                               /Renovation?                                           early to maximize the tax-       higher tax rate.”
                                                                                                                                      sheltered income earned in          For further information
                                                                             Get a better Rate with less
                                                                                                                                      your RRSP,” advises Carson.      about taxes, contact a
                                                                                hassle and no Fees!                                      “If you borrow to make a      Chartered Accountant.
                                                                                                                                      contribution to an RRSP, any         Brought to you by the
                                                                        Ask how you can do this and help the                          interest    paid     is   not        Institute of Chartered
                                                                              Essex Arena Fund too!                                   deductible. Therefore, you         Accountants of Ontario.

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