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- www.invis.ca. 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 519-776-7371 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 www.ivesinsurance.com 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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