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26 March 2024

Consumer

Do You Know Your Credit Score? Here's Why It Matters

Did you know that your credit score can both negatively and positively impact your life? Don't underestimate the power of a good credit score! Your score, a number between 300 and 850 that reflects your financial responsibility, can save you thousands of dollars over time. For instance, lenders reward borrowers with high scores with significantly lower interest rates.

Are you ready to learn more about your credit score and how to improve it?

How is your score calculated?

Lenders determine your credit score by analyzing your financial behavior. The following components are essential in providing a snapshot of your financial reliability and habits. Gaining a grasp on these factors empowers you to manage credit responsibly and make informed decisions that will improve your financial health.

  • Payment History: Your history of on-time payments is a critical factor that affects scores.

  • Credit Utilization Rate: How much of your available credit you use. Try to use less than 30% to show you manage credit responsibly.

  • Length of Credit History: How long have you been making good credit decisions? A longer history suggests experienced credit management, favoring your score.

  • New Credit and Credit Mix: Frequent applications for new credit can signal risk, potentially lowering your score. Likewise, a diverse set of credit accounts shows you can handle various types of credit, enhancing your score.

The Consequences of Neglect

Ignoring your score can have tangible consequences. Canadians who keep an eye on their credit scores and work to improve them can avoid getting stuck with high-interest rates.

These rates can seriously inflate the cost of borrowing money. Not to mention, regularly checking your score is crucial. Did you know it can also help you spot issues like identity theft before they cause long-term damage?

Empowering Yourself through Credit Monitoring

Obtaining your credit score is relatively simple. In Canada, you can get a free credit report each year from Equifax and TransUnion. Checking your report helps you track your credit health and make informed financial decisions.

For more frequent monitoring and early warnings, several free and paid credit monitoring services, such as easyfinancial’s Credit Optimizer are available in Canada. These services can send you regular updates and alerts about your credit score.

Beyond Borrowing: The Broad Spectrum of Your Credit Score

A strong credit score is essential for more than just borrowing money at a great rate. It can also, among other things, influence your ability to rent apartments. Some landlords require a minimum score to qualify. For example, the average credit score needed for renting in markets like Ontario can be as high as 716.

This demonstrates the broad impact of your credit score on various aspects of your life.

Crafting a Robust Financial Future

By understanding the factors that influence your credit score, you can take proactive steps to better manage it.

Think of your credit score as a valuable asset. Just like any asset, it requires careful monitoring, informed decisions, and an understanding of its impact. By actively managing your credit score, you're building a strong foundation for a stable and prosperous financial future.


Get approved for financing today!

Get approved for financing today!

Whether you are an existing client or brand new to LendCare, you can access financing for automotive repairs, healthcare (including dental and vision), and trips to the vet.


You can learn more about—and apply for—our current consumer financing programs below.

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