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5 Reasons To Stop Procrastinating and Check Your Credit Score Right Now

It affects your life in more ways than you might realize, yet a BMO survey found that the majority of Canadians have never checked their credit score. Worse yet, many don’t know what’s considered a good score, or how to achieve it.

To be blunt, life is a lot easier when you have good credit. You need a high credit score to be approved for everything from the best credit cards and lowest mortgage rates, to your dream job and rental housing. If you’ve never checked your credit score (or if it’s been a while) because you’re procrastinating, you’re afraid of what you’ll see, or you just don’t think it matters, here are five reasons to rip off that bandage right now.

It literally takes five minutes — and you can do it for free 

Canadians are entitled to one free credit report a year from each of Canada’s two credit bureaus (Equifax and TransUnion), but they make you pay to access your credit score. Forget that — it’s easier than ever to access it online for free. You can check your free credit score through (a one-time snapshot) in just a few minutes, after answering a few identity-verifying questions. Instant gratification.

Checking your credit score won’t lower it 

This is 100% a myth — pulling your own credit score will not lower it or affect it in any way. In fact, you should check your credit score at least once a year, if not quarterly. If you’re applying for major credit such as a mortgage, you should pull your credit score and report a couple months in advance to make sure you’re in good shape and your credit file doesn’t contain any errors.

Your credit score is your calling card 

Basically, it signals how financially trustworthy you are. The higher your score, the less risky you are because it shows you can manage your financial obligations. This is why landlords and employers also frequently use credit checks to screen potential tenants and employees. If you manage your credit responsibly, your score should reflect that — realistically, there shouldn’t be any surprises. The good news is that bad credit doesn’t have to last forever. Your credit score represents a snapshot in time, and can be improved with better habits: paying your bills in full and on time every month, paying off high-interest consumer debt, and keeping debt levels below 30% of your available limit.

There could be mistakes 

You can be the most responsible borrower in the world, but that doesn’t matter if errors in your credit report are dragging your score down. It’s not uncommon — credit bureaus don’t verify the accuracy of the information sent to them. If your credit score is drastically lower than expected or has dropped significantly from the last time you checked, it could mean there’s a mistake (or mistakes) in your credit report — it can also be a sign of fraud or identity theft. Aside from errors that could lower your credit score, it doesn’t hurt to verify that they’ve spelled your name and address correctly.

It’s probably higher than you think

Credit scores range between 300 and 900, with the average credit score in Canada hovering around 700 (the “fair” range). Anything below 660 is considered poor and likely disqualifies you from being approved for any type of credit, especially at a favourable rate. However, you’d have to continually and consistently mismanage your credit (hundreds of thousands of dollars in debt, bankruptcy, foreclosure, and liens) to drive it below 400. If you’re decent at managing your debt, your score will reflect that. You don’t need to stress over the exact point value of your score, which isn’t as important as which category you fall under: very poor, poor, fair, good, or excellent.

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