7 Ways To Raise Your Credit Score Posted on November 23, 2009 by Kerry
If you're in the market for a mortgage, a car loan, or looking to rent an apartment, it may be time to check your credit score.
A credit score is an ever changing three-digit number between 300 and 900. The higher your number, the more likely you are to be approved for a loan or to negotiate a preferred interest rate. If your credit score is low, you may pay higher rates or be denied credit based on the lender's criteria.
Check out the 5 Minute Guide to Your Credit Report and Credit Score to learn how to find your score.
Your credit score is an important piece of financial information. It's used by lenders, insurers, and landlords to gauge your credit behaviour and determine if you're a good candidate for credit. If you've lost out on an apartment or been denied a loan recently, it may be your credit score that's holding you back.
But don't worry if your score is low, there are ways to improve it. Since your credit score is recalculated continuously to reflect your recent bill payments and debt levels, your score from a month ago is probably not the same score today. Here are seven ways to raise your credit score:
1. Check your credit score at BOTH credit reporting agencies.
Your credit score can vary between Canada's two major credit reporting agencies, Equifax and TransUnion. Each agency uses different credit data as well as a slightly different credit scoring model to tally your number. If you're being denied credit, it may be that one agency is reporting differently. Checking your credit report and score at both agencies can also help you detect any fraudulent activity or possible instances of identity theft.
2. Report and correct any inaccuracies.
Don't let your credit score suffer due to inaccurate information on your file. Be proactive and protect yourself by reviewing your credit files. If you find an inaccuracy, contact the creditor or the credit reporting agency to correct it immediately.
3. Pay all your bills on time.
Lenders look for patterns and love to see a solid history of paying every bill on time. Any late credit card payments, collections, or bankruptcies can significantly lower your credit score -- so be punctual with each bill payment to raise your score.
Check out these 5 Ways to Beat Your Credit Card Debt for some score raising tips!
4. Watch your debt.
Don't run your credit balances close to your limit! Staying below half your available credit limit can help to improve your score sooner. For example, if you have a credit card with a $5,000 limit, try to keep the balance owed below $2,500.
5. Avoid applying for credit.
When you apply for credit, a "hard query" may be made to your report by the lender to check your creditworthiness. Too many "hard queries" in a short period of time can lower your score, so stick to applying for credit only when you need it. Checking your own score won't lower your score since this is a "soft query". Applying for a lot of credit may be interpreted as a sign of financial difficulty, which can impact your score as well.
6. Give yourself some time.
Time can improve your credit score, especially if you can establish a long history of paying bills on time and being responsible with credit. Negative factors such as bankruptcies, collections, or foreclosures drop off your report after a number of years, depending on your home province or territory.
7. Don't close old accounts.
It may seem counterintuitive to us, but unused credit is a good thing in the eyes of a credit reporting agency and lowering the amount of money you can borrow relative to your debt can impact your score.
Wednesday, November 25, 2009
Monday, November 23, 2009
Mortgage Rate Article
Consumers need to prepare for higher mortgage rates next year: advisers
Kristine Owram, THE CANADIAN PRESSTORONTO - The Canadian housing market has seen a stronger and faster rebound from the recession than any other segment of the economy, due in large part to enticingly low mortgage rates.
But rates this low - 5.59 per cent for a five-year fixed-rate mortgage and 2.25 per cent for a five-year variable-rate mortgage at one bank - can't last forever, and experts are advising borrowers to prepare for higher rates within the next 12 months.
"We have to realize those are emergency interest rates," said CIBC economist Benjamin Tal.
"Interest rates will rise - it's just a question of time, it's not a question of if. And if that's the case, we have to make sure that when we borrow this money we can afford the same mortgage 200 or 300 basis points higher. That's the key responsibility now of borrowers and lenders, to make sure that what we do, we do it in a prudent way."
Depending on whether they are fixed or floating-rate, mortgages are tied to either the bond market or the Bank of Canada's key lending rate, which are closely related. The central bank's rate has been sitting at a record low of 0.25 per cent since the spring and it has said it will keep it steady until at least next June to help stimulate the ailing economy.
On Wednesday, three of Canada's biggest banks - Royal Bank (TSX:RY), Bank of Montreal (TSX:BMO) and TD Bank (TSX:TD) - announced that they will cut posted rates for fixed-rate mortgages by up to 0.25 percentage points. On Thursday, CIBC (TSX:CM), Laurentian Bank (TSX:LB) and Scotiabank (TSX:BNS) followed suit by cutting their five-year mortgages by 0.25 per cent to 5.59 per cent, in the case of CIBC and Scotiabank, and 5.6 per cent at Laurentian.
But mortgage lenders agree that rates are nearing the bottom and will begin to rise again in 2010.
"The only sort of assurance that you hear in the marketplace is the Bank of Canada's going to try to maintain that rate until June. But past that, there are already warnings that if there need to be adjustments, the adjustments could be a little more abrupt than we've been used to in the past," said Martin Beaudry, vice-president of retail lending at ING Direct.
CIBC's Tal said that with rates this low, "it's almost a crime not to take a mortgage out," but warned that consumers need to be prepared for higher interest rates later on and what this could mean for their personal finances.
For example, a $200,000 mortgage with a term of 25 years and an interest rate of 2.25 per cent has monthly payments of $876.26. For the same mortgage with an interest rate of five per cent, the monthly payments become $1,169.18.
And this doesn't only apply to variable-rate mortgages, but to fixed-rate mortgages that are coming up for renewal, Tal said.
"It's not just variable rates, because five years from now the rates will be much higher, so you don't want to find yourself in a situation five years from now where you can't afford the house," he said.
"It's important to be extremely prudent and not to be totally blinded by those rates."
Both John Turner, director of mortgages at BMO, and ING's Beaudry said they've seen an increase in the number of people opting for fixed-rate mortgages to ensure some certainty when interest rates begin to rise again.
"In the first six months (of 2009), we saw well over 60 per cent of our applications being for variable-rate mortgages, and in particular in our case five-year variable-rate mortgages," Beaudry said.
"Towards the latter part of the summer, until now, the trend has reversed to where we're seeing about 70 to 80 per cent of our applications going for five-year fixed-rate mortgages."
Turner agreed, saying 60 to 70 per cent of BMO's customers were opting for variable-rate mortgages in the past, but lately "there's been a slight shift to fixed."
The key is finding a monthly payment you feel comfortable with and then thinking ahead - if you have a variable-rate mortgage, or a fixed-rate mortgage that's coming up for renewal soon, will you be able to afford to continue to make your payments if interest rates go up?
Turner said now is the time to begin making more frequent payments, while interest rates are still low, if you can afford it. This will reduce your principal more quickly and will mean lower payments down the road when interest rates are higher.
"For example, if you have a $200,000 mortgage and you opt to pay biweekly (instead of monthly), you knock four years off your mortgage and save about $47,000 in interest just by doing that," he said.
As well, if you have a variable-rate mortgage, it's important to keep an eye on interest rates and lock in if you feel they're getting too high, said Jim Murphy, president and CEO of the Canadian Association of Accredited Mortgage Professionals, or CAAMP.
The association also recommends that homeowners renew their mortgages before the scheduled renewal dates given the current low level of interest rates.
However, Murphy predicted that when interest rates do start to go up it will be a gradual climb, and Canadians shouldn't worry about a sudden jump in the number of people who are forced to default on their mortgages.
"I think people are predicting that rates will start to increase in 2010 at some point in time, but it'll be more of a slow, measured increase as it goes up, and most Canadians who have variable products will have the ability to lock in," Murphy said.
CAAMP says the volumes of residential mortgage credit outstanding is forecast to grow by seven per cent between 2009 and 2011, and is predicted to pass $1 trillion in 2010. The average mortgage interest rate was 4.55 per cent as of October, down from 5.41 per cent a year ago.
Tuesday, November 17, 2009
Home Sale Hit Record High;Outlook upgraded
Homes sales hit record high; outlook upgraded
John Morrissy, Financial Post
OTTAWA -- Home sales hit a new record high in October, leading the Canadian Real Estate Association to boost its outlook for 2009 and 2010.
Resale home activity was up 41.5% in the month, reaching a total of 42,288 units. On a seasonally adjusted basis, homes sold on the Multiple Listing Service totalled 45,818 units in October.
"Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year," said CREA president Dale Ripplinger. "The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories."
Further, said Millan Mulraine, economics strategist at TDSecurities, "we expect the recent strong gains in the housing market to remain largely intact, though we suspect that the back-to-back double-digit advance in sales seen earlier this year may not be repeated."
As a result of the sector's strong performance, CREA increased its forecast for sales in 2009 by 6.6% to 460,200 units. For 2010, the national industry group said sales would rise 7% to 492,300 units.
The average home price also reached new highs in October, climbing to $341,079, up 20.7% from a year ago. A separate measure, which limits its focus to Canada's major markets, showed the average price rising 22.1% to $373,095.
At the same time, the sharp rise in housing demand has eaten into inventories. With 194,994 homes listed for sale in Canada at the end of October, the number of listings is 20.8% below the peak reached in October of last year.
It is the sixth month in a row in which inventories have fallen from year-ago levels, bringing supply to 4.1 months on a seasonally adjusted basis, the lowest level in more than two years.
CREA chief economist Gregory Klump said new listings are expected to rise in coming months in response to headline average price increases.
New monthly sales records were set in about one fifth of local markets in October, including Toronto, Montreal and Ottawa. On a provincial basis, new records were set in British Columbia, Ontario and Quebec, largely as a result of increased activity in those provinces' major markets.
Canwest News Service
John Morrissy, Financial Post
OTTAWA -- Home sales hit a new record high in October, leading the Canadian Real Estate Association to boost its outlook for 2009 and 2010.
Resale home activity was up 41.5% in the month, reaching a total of 42,288 units. On a seasonally adjusted basis, homes sold on the Multiple Listing Service totalled 45,818 units in October.
"Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year," said CREA president Dale Ripplinger. "The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories."
Further, said Millan Mulraine, economics strategist at TDSecurities, "we expect the recent strong gains in the housing market to remain largely intact, though we suspect that the back-to-back double-digit advance in sales seen earlier this year may not be repeated."
As a result of the sector's strong performance, CREA increased its forecast for sales in 2009 by 6.6% to 460,200 units. For 2010, the national industry group said sales would rise 7% to 492,300 units.
The average home price also reached new highs in October, climbing to $341,079, up 20.7% from a year ago. A separate measure, which limits its focus to Canada's major markets, showed the average price rising 22.1% to $373,095.
At the same time, the sharp rise in housing demand has eaten into inventories. With 194,994 homes listed for sale in Canada at the end of October, the number of listings is 20.8% below the peak reached in October of last year.
It is the sixth month in a row in which inventories have fallen from year-ago levels, bringing supply to 4.1 months on a seasonally adjusted basis, the lowest level in more than two years.
CREA chief economist Gregory Klump said new listings are expected to rise in coming months in response to headline average price increases.
New monthly sales records were set in about one fifth of local markets in October, including Toronto, Montreal and Ottawa. On a provincial basis, new records were set in British Columbia, Ontario and Quebec, largely as a result of increased activity in those provinces' major markets.
Canwest News Service
Friday, October 23, 2009
Central bank forcasts 3% GDP growth in 2010
Central bank forecasts 3% GDP growth in 2010
The Canadian economy is projected to grow by three per cent in 2010 and 3.3 per cent in 2011, the Bank of Canada said in its latest economic forecast Thursday.
The projections are slightly different from those the bank put out in its last update in July. Growth in the second half of this year looks strong, the bank said, with gains in economic output of two per cent and 3.3 per cent in the third and fourth quarters.
That's up from the July estimates of 1.3 per cent and three per cent respectively.
Overall, the Canadian economy is expected to shrink by 2.4 per cent in 2009. That's slightly worse than the 2.3 per cent forecast in July.
The projections for the medium term were downgraded slightly. The three per cent expectation for 2010 in unchanged, but the 3.3 per cent growth the bank now expects in 2011 is 0.2 percentage points off what was expected in July.
"Global economic and financial developments have been somewhat more favourable than expected at the time of the July Report, although significant fragilities remain," the bank said in its latest Monetary Policy Report.
The economy will not reach capacity, when supply and demand are in balance, until 2011, the bank now forecasts.
Despite the generally positive overall tone, the document notes the bank is deeply concerned by the effects of a soaring loonie. "Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures," the bank said.
"The current strength in the dollar is expected, over time, to more than fully offset the favourable developments since July."
The Canadian dollar remained relatively stable from July to early October, trading in a range of 90 to 94 cents US. More recently, however, it has appreciated sharply, averaging about 96 cents US over the past 10 days, much higher than the 87 cents US the bank had assumed at the time of its July report.
In the immediate aftermath of the news, the Canadian dollar fell, slipping a third of a cent to 95.24 cents US at midday. "The Canadian dollar is finished in my mind," currency trader Ian Cochrane at Calgary-based BNH Strategies told CBC News. "Forget about raising rates, they're going the other way. The Bank of Canada governor basically told us this in no uncertain terms."
On Tuesday, the bank maintained its policy rate at 0.25 per cent and reaffirmed its conditional commitment to hold its current policy rate steady until the end of the second quarter of 2010.
"People should manage their affairs prudently in anticipation that at some point rates will return to a more normal level," Bank of Canada governor Mark Carney said at a press conference following the release of the report on Thursday.
"Clearly there are going to need to be adjustments in exchange rate policies in many G20 countries." Carney also expressed some concerns over consumer debt levels, saying it is something the bank keeps a close eye on.
"Consumer borrowing cannot grow faster than the economy forever, to state the obvious," he cautioned. "But Canadian consumer balance sheets are starting from a much firmer starting point than U.S. ones," he noted.
From Sympatico finance page
The Canadian economy is projected to grow by three per cent in 2010 and 3.3 per cent in 2011, the Bank of Canada said in its latest economic forecast Thursday.
The projections are slightly different from those the bank put out in its last update in July. Growth in the second half of this year looks strong, the bank said, with gains in economic output of two per cent and 3.3 per cent in the third and fourth quarters.
That's up from the July estimates of 1.3 per cent and three per cent respectively.
Overall, the Canadian economy is expected to shrink by 2.4 per cent in 2009. That's slightly worse than the 2.3 per cent forecast in July.
The projections for the medium term were downgraded slightly. The three per cent expectation for 2010 in unchanged, but the 3.3 per cent growth the bank now expects in 2011 is 0.2 percentage points off what was expected in July.
"Global economic and financial developments have been somewhat more favourable than expected at the time of the July Report, although significant fragilities remain," the bank said in its latest Monetary Policy Report.
The economy will not reach capacity, when supply and demand are in balance, until 2011, the bank now forecasts.
Despite the generally positive overall tone, the document notes the bank is deeply concerned by the effects of a soaring loonie. "Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures," the bank said.
"The current strength in the dollar is expected, over time, to more than fully offset the favourable developments since July."
The Canadian dollar remained relatively stable from July to early October, trading in a range of 90 to 94 cents US. More recently, however, it has appreciated sharply, averaging about 96 cents US over the past 10 days, much higher than the 87 cents US the bank had assumed at the time of its July report.
In the immediate aftermath of the news, the Canadian dollar fell, slipping a third of a cent to 95.24 cents US at midday. "The Canadian dollar is finished in my mind," currency trader Ian Cochrane at Calgary-based BNH Strategies told CBC News. "Forget about raising rates, they're going the other way. The Bank of Canada governor basically told us this in no uncertain terms."
On Tuesday, the bank maintained its policy rate at 0.25 per cent and reaffirmed its conditional commitment to hold its current policy rate steady until the end of the second quarter of 2010.
"People should manage their affairs prudently in anticipation that at some point rates will return to a more normal level," Bank of Canada governor Mark Carney said at a press conference following the release of the report on Thursday.
"Clearly there are going to need to be adjustments in exchange rate policies in many G20 countries." Carney also expressed some concerns over consumer debt levels, saying it is something the bank keeps a close eye on.
"Consumer borrowing cannot grow faster than the economy forever, to state the obvious," he cautioned. "But Canadian consumer balance sheets are starting from a much firmer starting point than U.S. ones," he noted.
From Sympatico finance page
Monday, October 19, 2009
Good habits we've gained from the recession
Good habits we’ve gained from the recession
Posted on October 14, 2009 by Flyerland
Throughout the recent economic meltdown many people started cutting back on their spending and living on less. The Canadian economy is moving toward recovery, but it still pays to be frugal, especially when you’re saving for the things you really want. Maintaining your recession shopper savings strategies—even in good times—can help you keep more cash in your pocket.
Here are just a few of the valuable lessons learned through the recent financial crisis that we should keep in mind no matter how the economy is doing.
Posted on October 14, 2009 by Flyerland
Throughout the recent economic meltdown many people started cutting back on their spending and living on less. The Canadian economy is moving toward recovery, but it still pays to be frugal, especially when you’re saving for the things you really want. Maintaining your recession shopper savings strategies—even in good times—can help you keep more cash in your pocket.
Here are just a few of the valuable lessons learned through the recent financial crisis that we should keep in mind no matter how the economy is doing.
- Review your spending habits. Do you know where your money is going each week? One tried and true trick is to track every purchase for a week or two. Write down everything from the grocery bill to the cost of your morning latte. You will likely see spending patterns emerge and places where you can cut back and save.
- Use a shopping list. More people are using—and sticking to—lists to plan shopping trips. This helps to avoid over-spending or purchasing items you don’t need. And, why not try shopping for things like groceries online, where there might be less impulse buys if you can’t see and smell the goods.
- Shop the sales. Who doesn’t like buying stuff on sale? Check out Flyerland.ca for the latest flyers—not only for deals on groceries but clothing, electronics, furniture, home improvement and much more!
- Buy in bulk. When you find a great deal on the items you use every day—food staples and non-perishables, cleaning supplies, laundry detergent or dog food—stock up and save.
- Try other stores. If you shop at the same supermarket you could be missing out on super savings. Flyerland.ca posts flyers for all the major stores, making it easy to compare prices.
- Use points cards. When your favourite products are on sale or can earn you bonus points, buy a bunch. The points add up and can save you money on future purchases. Take a few minutes to register for the points program at your local stores. Shopping at Sobey’s, Loblaws, Metro and Shopper’s Drug Mart can earn you points, and that adds up to savings. The caveat is to make sure that you are buying things that you need or use often.
- Invest your savings. People are budgeting smarter and planning better. And with all the money you’re saving there are ways to invest. Contribute to an RESP for your children, or open a Tax-free Savings Account and save up to $5,000 each year without paying tax on the interest. You can also use your savings to pay down your mortgage or up your RRSP contribution—your financial planner can recommend the strategy that’s best for you.
Tuesday, October 13, 2009
Mortgage Rate On The Rise
Mortgage rates on the rise...some lenders still offer current rates until midnight tonight
Several Canadian banks raise rates for closed, fixed rate mortgages
THE CANADIAN PRESS TORONTO -
Several Canadian banks (TSX:BNS, TSX:CM, TSX:BMO) raised their posted rates for closed, fixed rate mortgages by up to 0.35 percentage points effective Wednesday.
Scotiabank, CIBC and the Bank of Montreal all raised their five-year closed rate by 0.35 percentage points. Increases for other mortgages ranging from one year to 10 years ranged from no change to 0.35 percentage points.
The change follows a similar move by the Royal Bank to raise rates last week.
Several Canadian banks raise rates for closed, fixed rate mortgages
THE CANADIAN PRESS TORONTO -
Several Canadian banks (TSX:BNS, TSX:CM, TSX:BMO) raised their posted rates for closed, fixed rate mortgages by up to 0.35 percentage points effective Wednesday.
Scotiabank, CIBC and the Bank of Montreal all raised their five-year closed rate by 0.35 percentage points. Increases for other mortgages ranging from one year to 10 years ranged from no change to 0.35 percentage points.
The change follows a similar move by the Royal Bank to raise rates last week.
Monday, October 12, 2009
How to know if you qualify for the new Home Buyers' Tax Credit
How to know if you qualify for the new Home Buyers' Tax Credit
www.newscanada.com
Find out if you meet the criteria to claim federal government money
Before you claim the proposed First-Time Home Buyers' Tax Credit, there are some things you should know about qualifying:
Neither you, your spouse or common-law partner lived in a house that either of you owned in the year of purchase or any of the four preceding years.
- If you are a person with a disability or are buying a house for a relative with a disability, you don't have to be a first-time home buyer. However, the home must be purchased to allow the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
- A qualifying home is a housing unit located in Canada that already exists or is being built.
- A share in a co-operative housing corporation that entitles you to possess, and that gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
- The home must have been acquired after January 27, 2009.
The HBTC is part of the Government of Canada's $62 billion economic stimulus announced in the Economic Action Plan to give first-time home buyers up to $750 in tax relief.
For more information, visit www.cra-arc.gc.ca.
www.newscanada.com
Find out if you meet the criteria to claim federal government money
Before you claim the proposed First-Time Home Buyers' Tax Credit, there are some things you should know about qualifying:
Neither you, your spouse or common-law partner lived in a house that either of you owned in the year of purchase or any of the four preceding years.
- If you are a person with a disability or are buying a house for a relative with a disability, you don't have to be a first-time home buyer. However, the home must be purchased to allow the person with a disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.
- A qualifying home is a housing unit located in Canada that already exists or is being built.
- A share in a co-operative housing corporation that entitles you to possess, and that gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.
- The home must have been acquired after January 27, 2009.
The HBTC is part of the Government of Canada's $62 billion economic stimulus announced in the Economic Action Plan to give first-time home buyers up to $750 in tax relief.
For more information, visit www.cra-arc.gc.ca.
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