Credit can be hard to understand, after all we don’t learn about in school. This confusion is often made worse by common misconceptions you hear from well meaning friends and family. VIDrives is a dedicated team of credit, financing and vehicle specialists that are here to help you understand, navigate and improve your credit– Read on for our guide to the top 6 Credit Myths.
Myth #1: Checking your score hurts your credit
Don’t worry, this isn’t true! You can request and receive your credit score without triggering penalty on your credit profile. However, when you apply for a loan, credit card, or line of credit- this may affect your credit score when a third party requests your credit report.
If you’re interested in checking your credit score, look for a tool in your online banking, or one of the two national credit bureaus- Equifax and Trans Union.
Myth #2: Cosigning does not affect your credit
Even if you co-sign on a loan, you may have the responsibility for that debt in the event the other party misses payments. Your credit will be affected just like theirs.
Myth #3: Cancelling credit cards improves credit health
We understand the logic of this, but it doesn’t exactly work this way. A big part of how your credit score is calculated is utilization, and clipping a credit card decreases the amount of credit available to you- which increases your utilization- you’re better off paying down the balance and not touching that card. Additionally- closing the credit card will not remove it from your credit report- and will stay on your profile for up to 6 years.
Myth #4: Higher Income means a Higher Credit Score.
Credit scores generally reflect how well you’ve paid your bills, not how much money you have available to pay your bills. It can be easier to improve your credit with a higher salary, but only because that makes it easier to pay down, or pay off your loans. Additionally, creditors may approve you for larger loans when you have a higher income.
Myth #5: Paying the minimum keeps your credit score up
While making payments won’t lower your credit score, the interest accrued may- over time increase your utilization and hurt your score. Keep making your payments of course, but it’s important to ensure that you’re taking other measures if you hope to increase your credit score.
Myth #6: Divorce takes away your former spouse’s bad credit habits.
This isn’t necessarily true. Your joint accounts won’t automatically split after a divorce is finalized- so it’s important to contact your creditors and ask them to convert your joint accounts into individual accounts- to ensure that your former spouses money habits no longer affect your credit. Additionally, closed Joint accounts may continue to report on your credit bureau.
Still have questions?
Not to worry! Check out our blog for more information about financing and credit, or take advantage of our complimentary options review to help you understand your own credit- It’s free and won’t affect your credit score.
Here on the Island, we’re lucky enough to (usually) have our winter delayed until around late November, still it’s better to be prepared for the cold weather before you’re caught in a snowstorm. Here are some easy steps that you can take to take care of your vehicle, so it can take care of you this winter.
𝐒𝐭𝐞𝐩 𝟏: Seasonal Maintenance Check Up
Vehicle Maintenance isn’t seasonal, but as the weather get’s colder and the rain get’s heavier- it’s important to take extra care.
At your next oil change, ask your regular service department to checkout your:
In BC Winter Driving Laws go into effect on October 1st, on some highways that means you’ll need winter tires.
Winter tires provide shorter stopping distance and better traction control when the roads are hazardous, but they wear down faster during warmer days. When you make your appointment for a 𝙒𝙞𝙣𝙩𝙚𝙧 𝙈𝙖𝙞𝙣𝙩𝙚𝙣𝙖𝙣𝙘𝙚 𝘾𝙝𝙚𝙘𝙠-𝙐𝙥 let them know you want to install your winter tires, if you don’t have winter tires most service departments can find some for you!
𝐒𝐭𝐞𝐩 𝟑: Keep it Clean
We know washing you car in the winter isn’t fun, but it’s important to keep your vehicle in top shape. slushy snow and rock salt can damage the bodywork and paint on your car, to prevent this- make sure you’re cleaning the painted part of your car and the underside to prevent rust and paint damage, to keep it protected longer consider a wax or an undercoat.
Snow is heavy, and winter blades make pushing snow and ice much easier. Check your owners manual for which types of winter blades are the best fit for your car, or swap your blades during your 𝙒𝙞𝙣𝙩𝙚𝙧 𝙈𝙖𝙞𝙣𝙩𝙚𝙣𝙖𝙣𝙘𝙚 𝘾𝙝𝙚𝙘𝙠-𝙐𝙥. As an added bonus they heavier duty blades will be helpful for fall and spring showers.
𝐒𝐭𝐞𝐩 𝟓: Prepare a Winter Emergency Kit
All the steps mentioned above can be helpful for avoiding breakdowns, flat tires, and collisions but in the event that something happens you and your passengers can be left stranded out in the cold waiting for help.
Getting your car professionally detailed gets pricey fast, but frequent cleaning is an important habit to keep your vehicle in good condition- That’s why many drivers opt for an affordable DIY Detail.
Here are some tips, product recommendations and advice to save you some time and money when you’re detailing your car.
Find a comfortable workstation
Even with the best tools and strategy, detailing your car is a physical job. Make sure to wait for a day with comfortable temperatures, or if you have a garage- use that.
If you’re using a hose, or a vacuum- be mindful of the chords and hoses to avoid mixing water and electricity and any snags on your vehicle.
Start with the Interior
Just like when you wash a cup, you clean the inside before the outside- removing debris from the interior can dirty the exterior as well. Start by removing any garbage, then a quick vacuum- and move onto the hard surfaces.
The Two Bucket Method
Whether you opt for a fancy car wash liquid, or a gentle (and affordable) combination of warm water and a little dish soap- you’ll need one bucket for washing, and one for rinsing to avoid leaving your car with an ugly cast of soap residue.
While you’re at it, make sure to have lots of rags on hand (We love microfibre cloths) to avoid smudges or damage- and use a light hand when you’re working on the exterior paint, and more delicate vehicle interior surfaces.
Use Gentle Tools
Many modern vehicle interiors use high-gloss finishes, like piano-black or chrome. These surfaces gleam in the sun and have a high-end look and feel, though they’re also dust magnets, and easy to scratch.
To properly clean glossy trim without causing scratches that’ll dull the surface, you need to be gentle. Never rub or scrub at these surfaces harder than you need to, and consider using a Swiffer duster and some soft-bristle paint-brushes from your local craft store to safely and effectively remove irritating dust and dirt from glossy surfaces, nooks and crannies etc.
Chrome Polish, or Alternative
If you have chrome wheels, chrome trim and badging or tail pipes- a Chrome or metal polish will do the job best- but WD40 on a clean rag will get it done with a lustrous and slick shine.
Be Careful with the Screens
Most modern vehicles have a center display screen for the infotainment system, and a digital screen for vehicle information like speed, fuel range and the like. These screens can be finicky and delicate- so make sure to check your owners manual for specific instructions on how to care for them. Generally, Phone screen and eyeglass cleaners will do the trick just fine.
Rinse (and Repeat)
Start with a thorough rinse with lots of water to loosen up the dirt on the surface of your vehicle. Once you do a general once over, do it once more- focusing on the grooves of your vehicle.
Don’t touch the paint with your hands
Your car’s paint can be damaged easily, and scratches can make a once shiny car look dull and faded.
If it can be avoided- try to touch your paint as little as possible. Use a gentle high quality soap with a sponge or soft rag so you can avoid excessive scrubbing.
Replace your bucket
Your vehicle’s wheels and tires are usually the dirtiest part of your vehicle- as they’re typically covered with brake dust, bits of metal and anything you pick up driving around, so wash these first with a sponge and a fresh bucket, then empty the bucket and replace it with clean soapy water and a new sponge.
Using one pail and sponge for your wheels, and another for everything else, prevents cross-contamination of abrasive particles from damaging your ride’s paint, helping it last longer and look better for years to come.
Many dealerships advertise low payments, but there’s usually a catch. Whether it be high down payments, not including the taxes, being quoted a lower interest rate than you qualify for- and then you have to consider other budget factors! True cost of ownership is made up of your monthly payments, yearly maintenance and how much you may need to save towards that, the cost of fuel, and your insurance premiums. In this article we’ll break down these factors and how to plan ahead next time you’re shopping for a vehicle.
Payment Total
To get a sense of your total payment you’ll need to have a decent estimate of how much the total price of a vehicle is, how high of a down payment you’re willing to pay (if any), the cost for financing you’ll qualify for and how much you’ll be taxed on the purchase price.
So how do you figure this out?
Total Vehicle Price
The total vehicle price can be the most simple item on this list, as it can be found while you’re shopping or by simply asking the seller and including the price of any add ons you opt in for.
Here’s where it gets complicated: Are you trading in? When you trade in a vehicle that changes the total price of the vehicle you’re purchasing. This can be as simple as subtracting the value of your current vehicle from your new vehicle, but when you’re still making payments on your current vehicle you have to consider what you still owe. If you owe more on your current vehicle than it’s worth- that’s called negative equity and will actually increase the total vehicle price.
To find out what your vehicle is worth, consider looking up your make, model, year and trim on an online database like Autotrader, and looking at the value of vehicles in similar condition with similar kilometers- or skip the extra research and Value Your Trade using our tool. If you’re still making payments, contact the lender you’re financing with and find out the remaining balance and com
Once you have this information- hold onto it as you continue your fact finding mission.
Down Payment
A down payment is a payment that is made up front- toward the purchase of something you’re financing. The reason we don’t include your down payment as a part of the total vehicle price is that it will affect the amount you’ll finance (and your payments + cost of borrowing), but not your total vehicle price (or the amount of tax you’ll pay).
You may opt to make a higher or lower down payment (if at all) to avoid or minimize the risk of negative equity if you’re planning to trade in, to lower your monthly payments, or to save money on the cost of financing.
Cost of Financing
Cost of Financing is one of the most important factors in determining total payment, and it is calculated using the interest rate and term that you qualify for. So how are these factors determined? Here are some of the basics
Lenders select interest rates (and terms) based on the risk of issuing a loan, and what they stand to lose if the loan is not repaid (essentially, will they be able to recover lost funds by selling your vehicle?). If your credit profile is good, that’s considered low risk, if you have a spotty credit history, the risk increases. This generally means that a lender will offer a low risk borrower a longer payment term, and lower interest rates resulting in a lower monthly payment, than a high risk borrower purchasing the exact same vehicle.
How do you know if you’re a high risk borrower? Knowing your credit score is a great place to start- but it doesn’t paint a full picture, as things like your current financial obligations, as well as your length and stability of employment can affect your risk factor as well. The best way to know where you’ll stand is to get pre-approved, before you start shopping- so you can look at payments with an estimated interest rate.
VIDrives offers a pre-approval service that doesn’t affect your credit score, with no obligation to purchase with us.
How much tax you’ll pay
In BC, unless you’re eligible for tax exemption, the purchase of a vehicle from a licensed dealer comes with the added cost of Provincial Sales Tax (PST) and the Federal General Sales Tax (GST). While you don’t have to pay GST on a private sale, The PST increases in this case, So how much will you end up paying? If you’re purchasing for $55,000 or less you’ll pay 12% whether you buy privately or from a dealership, but after that the PST increases incrementally- for BCs Luxury Tax.
Dealership Sale Price (PST+GST)
Private Sale Price (PST)
Under $55,000 (7+5%) 12%
Under $124,999 (12%)
$55,000 – $55,999 (8+5%) 13%
$56,000 – 56,999 (9+5%) 14%
$57,000 – $124,999 (10+5%) 15%
$125,000 – $149,999: (15+5%) 20%
$125,000 – $149,999 (15%)
Over $150,000: (20+5%) 25%
Over $150,000 (20%)
Here’s where your trade in comes back into play- When you trade in your car, the amount of the new purchase is reduced by the value of your trade in, and then you only need to pay tax on that reduced amount of the sale. It can also reduce your payments in the long term if you are financing.
For example, If you’re a BC Resident and you purchase a Sporty SUV for $35000, you’d pay $4200 in Tax- But if you’re trading in your old SUV that was valued by the Dealership at $10,000, you’ll only pay tax on $25000 or $3000, which saves you $1200
Once you have all of the Values listed above- it’s time to plug them into a Car Loan Calculator to have an idea of what you’ll pay in total interest, overall, and per payment.
Other Costs
Insurance
In BC, ICBC Basic Autoplan insurance is mandatory for any driver- and the cost of that is determined by the driver’s risk, and the risk based on the location and how much you drive.
When registering your vehicle, you’ll be asked who drives your vehicle and they will determine the risk factors of all drivers based on driving experience and crash history over a 10 year scan period. The primary driver makes up 75% of the premium calculations, and the remaining 25% is based on the listed driver with the highest risk. If the other listed driver is a household member or employee, and has a lower risk factor- the premium may be reduced.
Beyond the basics, Insurance Products like Collision, Comprehensive etc. will cost more and are affected by the year, make and model of your vehicle, what you set your deductible to, and safety features your vehicle has.
To get a better idea of how much you’ll pay for insurance Get an Estimate from ICBC so you can factor this into your budgeting.
Cost of Maintenance
While new, and many pre-owned vehicles come with extended warranty for unexpected repairs, there are still some maintenance items you’ll need to pay for. This can include oil changes, brakes, fluids and even air conditioning among other things.
Cost of maintenance will depend on your vehicle, and where you get it serviced, you can look up your vehicle’s average yearly cost of maintenance and divide that by 12 to have a rough idea of how much money you should set aside per month if you’ll need to save up for more expensive maintenance- or look at your vehicle’s recommended schedule of maintenance and talk to your mechanic or service departments for estimated costs for a more detailed idea.
To save some money on the cost of ownership, talk to your financing specialist about our Free Oil Change program.
Cost of Fuel
Cost of fuel is perhaps the most unpredictable item on this list, because it depends on your vehicle’s fuel efficiency, where and how much you drive, and the fuel prices in your area- But if you have a rough idea of how many KMs you drive each month, you can have a reasonable idea by using a Fuel Cost Calculator with current prices and your vehicles L/100km.
Start shopping for a vehicle that works for your budget at VIDrives.ca
With road trip season officially underway, it’s time to get ready to hit the open road and go wherever the pavement may take us. While road trips are often carefully planned, it’s easy to get a few kilometers down the road and realize “shoot, I forgot to pack _____.” So, to keep unplanned stops and complications to a minimum- there are a few things you should bring to ensure the trip goes smoothly.
Below, we’ll list and explain some of the road trip essentials you’ll want to pack before heading out on your trip.
For more road trip tips- check out our other posts!
1. 12-Volt Phone Charger
If you drive a newer vehicle, chances are it will come with at least one USB port to charge your phone and connect it to your vehicle. But it never hurts to have a few 12-volt chargers- bonus points if they come with multiple USB ports.
This helps you make sure that you have enough ports to keep every device charged- and cut’s down on road trip arguments with your passengers. If there’s enough charging ports to go around, and to charge everyone’s entertainment devices- that can cut tensions down and avoid “what’s your phone at?” exchanges.
While you’re at it- make sure to bring plenty of charging cables too- micro USB, USB and Lightning being the most common.
2. First Aid Kit
You should always have a first aid kit in your car, but especially for road trips. There’s no need to go crazy on a top of the line kit- but a simple kit with some basics like bandages, gauze antiseptics and some over the counter medicine for motion sickness and headaches etc. will do the trick.
This will make sure that any basic ailments can be quickly cared for if necessary. Many people keep their kits in the trunk- but it might be best to keep it in the main cabin for easy access for you and your passengers.
3. Insulated Water Bottle
Everyone get’s thirsty, and there’s nothing worse than having to stop at a gas station or a drive through every time it happens- especially when you factor in the bathroom breaks this adds.
When you bring an insulated water bottle, you’ll be saving time and money by bringing your water from home, avoiding leaks, and making sure that your water stays cool and refreshing on hot days.
4. Hand Sanitizer
While good planning can cut down on stops, you’re still gonna have to make stops in unfamiliar places with unfamiliar germs. It’s important to keep your hand cleans when you interact with objects many others touch, like fuel pumps or door handles- especially if you’re road tripping with others.
Using your own stock of hand sanitizer can help keep you and your passengers from getting travel bugs that dampen your road trip.
5. Sunscreen
The imfamous “Drivers tan” is a very real thing- and Canadian summers get hot. Bring along some sunscreen and apply it regularly to avoid an uncomfortable drive with a painful sunburn.
6. Jumper Cables or Booster Pack
A dead car battery can throw a wrench into any road trip- so make sure to prepare.
Jumper cables are an excellent choice because they don’t take up too much of your valuable trunk space, but you’ll have to wait for a good samaritan with a second vehicle to get going again. If you have a little extra space- get a booster pack (a battery-powered unit that can jump-start a car all on it’s own) and make sure you charge it to full capacity before taking off on your adventure.
7. Toiletries
This seems like a no brainer, but it’s an easy one to forget. If you’re trip will last more than a day- pack your toothbrush, toothpaste, hair brush, deodorant, hair products, soap, shampoo, conditioner and any other grooming necessities. Additionally, bring a roll of toilet paper or baby wipes in case nature calls at an inopportune time on the road.
8. Travel Mug
Okay, this one might not be essential- but it’s helpful to keep an insulated travel mug for road trips. Fast food coffee cups won’t keep your beverages hot, can start to leak, and spill easily. When you get your road trip cup-o-joe simply transfer it into your travel mug, then throw away the paper cup.
9. Rain Jacket or Poncho
It‘s hard to predict when rain will strike on a Canadian road trip, and it may not be convenient to hold an umbrella, such as if you’re building a tent or a fire. A poncho or rain jacket will keep you dry like an umbrella, but you’ll have two free hands to get the job done.
10. Sleeping Bag
Even if you’re not camping- a sleeping bag with a low temperature is a great addition when you’re packing your car. Just in case you break down in the cold, or you can’t find a hotel and get stuck sleeping in the car.
11. Maps
Many newer vehicles are equipped with Apple CarPlay and Android Auto, which have built-in GPS systems like apple maps or google maps. However, not every car has this, so you can either get a windshield mount for your cellphone and use Google Maps or Apple Maps straight from the phone or purchase a standalone GPS unit and use this instead.
Additionally, keeping a paper map in case of dead zones, broken phones or other unforeseen circumstances can be a good idea as well.
12. Portable Charger
Even with charging ports and extra chords, it’s good to have a portable charger as well. What happens if the car dies? You can no longer charge your phone at this point, so having a portable charger that you can plug your phone into will come in handy.
13. Garbage Bags
When you’re stopping for snacks and drinks, they usually come with wrappers, bottles, and other garbage. Instead of jamming them in every available cupholder, glove box, and door pocket- bring along some grocery bags to store it in which will make it easier to throw it out at your next stop.
14. Roadside Emergency Kit
If you break down or run out of fuel, a roadside emergency kit can help. These generally include safety items, like flares or warning triangles, which you can place behind your vehicle to warn other drivers your car is stopped. They may also include a small tool kit to perform light repairs, tire sealant, and other items that can come in handy in a pinch.
You can assemble an emergency kit on your own, or get one pre-made from companies like our friends at Get My Kit- who make excellent, affordable options for emergency kits.
Add a Quality Pre-Owned Car From VIDrives to Your Road Trip Essentials List
While putting together your road trip checklist, you may want to include a quality pre-owned vehicle to ensure your trip is smooth and enjoyable. You can pick up this quality pre-owned vehicle from VIDrives.
Not only can you skip the dealership and buy your vehicle online, but you get the added peace of mind that every pre-owned vehicle we sell goes through a comprehensive inspection and reconditioning process.
Buying a car can generate all types of emotions and fear is definitely near the top of the list. Consider these tips the next time you’re in the market for a new or used car to help you get the best car for the best price.
What are we so worried about?
It’s easy to see why so many folks are apprehensive about shopping for a new car, van truck or SUV: Vehicle purchases are the second largest (and longest) financial investment we make next to real estate. That’s a lot of your hard earned cash to fork over to operate your own vehicle in BC.
Even though new vehicle prices are fixed from the manufacturer, the amount you’ll pay for your new ride can have a difference of thousands of dollars from one dealership to the next- especially in this market. Factors such as the availability of stock, end of model clearances, rebate programs, trade-in value or how motivated the commissioned Salesperson is to sell it to you, all contribute to your final price.
Used vehicle shoppers suffer a different kind of anxiety as no two used cars or trucks are identical, so that makes price comparisons difficult. Used car shoppers may be armed with a Kelly Blue Book or the Canadian Black Book to help determine a ball park figure, but it’s factors like mileage, wear and tear, options, and how much the Dealer had to spend to get it retail-ready that will determine a used vehicle’s one-of-a-kind price tag. Check out our rankings for some information on some of the best used SUVs and Cars to buy in Canada.
Here are some questions to ask yourself so that you can feel more informed, and prepared when you shop for a vehicle.
Question 1: What about your current vehicle?
You’ve likely thought a lot about your current vehicle by the time you’ve decided to make a change- so how can this help you with your next purchase?
The first thing you need to think about when it’s time for something new, is what you’re driving now. What do you like about it? What doesn’t work for you- what do you wish was different. This is a great way to determine what you really need or want in your next ride.
Additionally, make plans for what you’ll do with your current vehicle- are you handing down to a family member? Keeping it as a spare? If you’re selling it- are you going to do so privately or trade it in for the tax savings on your new vehicle?
If you’re planning to sell your vehicle- It’s a good idea to look online at what similar vehicles are going for, or an online trade appraisal like the one offered by VIDrives- and if you’re paying it off still whether this sum will cover the amount remaining on your loan. If you’re planning to trade-in, any outstanding balance will be taken care of by us, or the dealership with no extra work or headache on your end. Your trade in value, new payments and loan amount should always be presented to you before signing documents, so you can make your decision confidently, and knowing all the information.
Question 2: How much am I willing to pay?
You may have dreams of a luxury sports car, but your budget may determine a practical SUV instead. Remember to factor in operating costs in addition to your purchase price or monthly payment.
Consider the differences between short term and long term financing, whether you’d like to use your savings to pay cash, or procure a car loan. If you’re interested in building credit, don’t have the cash on hand, or are saving for something else- financing may be the most cost effective, and most convenient option.
Make sure your car payment leaves room in your budget for the remainder of the cost of ownership, such as fuel costs, car insurance, regular maintenance and repairs. Consider Extended Warranty options to mitigate some unexpected costs associated with your vehicle as well.
The average car loan in 2021 was around 84 months, or 7 years. So it’s important to think about your overall financial landscape over the foreseeable future- like your other bills, housing costs, income, and potential for other large expenses to arise. Leaving some wiggle room in your budget at the end of the month, it may help mitigate some of the risks and fears associated with buying a vehicle.
Question 3: What do I need, and what can I live without?
Once you have a basic understanding of your budget, and with your current vehicle in mind- it’s time to narrow down your search for a vehicle.
Firstly, what do you need? If you’ve frequently found your current vehicle is too small, or won’t fit enough passengers- you’ll need something larger. If you’ve found that you rarely use all the storage space, and get upset at your monthly cost of fuel, that could mean it’s time to downsize.
Next, what do you want? What is it you love about your current vehicle, or what have you been missing? Maybe heated seats in the winter are a must for you, or you love having a sunroof. If you love listening to music, maybe a good sound system is an asset.
Here are the major subjects to consider when you’re deciding what you’re looking for:
Seating: will the seats be comfortable? How many seats are there? Leather or Cloth, Electric or Manual Adjustments? Heated Seats? Cooled Seats?
Engine and Performance: Do you like a Manual or Automatic Transmission? Is Horsepower important to you? Do you need your vehicle to tow anything? What’s the Fuel Efficiency like?
Safety Features: How are the crash test ratings? Do you want things like lane departure warning or brake assist? Does it have a backup camera? How many Airbags?
Convenience and Comfort: Do you use cruise control? What about Adaptive Cruise Control? Power Windows? Power and Heated Mirrors? Does it have enough cup holders for your morning iced coffee and your water bottle? What about outlets to charge your phone or other devices?
Infotainment and Tech Features: Do you need GPS? What about apple carplay or android auto? Does a Touch Screen Matter to you? Do you still use CDs? What about the speaker systems or surround sound? Bluetooth, Wifi or anything else you might need.
Storage and Cargo Capacity: Think about features like cargo space, stow and go, trunk space, tonneau covers and box liners.
Warranty: How much factory warranty, if any is left? Can you top this up with an extended warranty? What will it cover? How much is the deductible?
One way to make selecting the right vehicle easier is scheduling a No-Obligation Options review with us via phone or email. Our vehicle specialists will review your budget, lifestyle and preferences to find you the best solutions for your specific needs.
Make the process easier with a No Obligation Options review from VIDrives.
If you are unsure about your budget, or just want to shop knowing exactly what you can afford, get pre-approved for financing at VIDrives.ca
With a pre-approval we will provide you with personalized finance terms- for your unique situation that can help point you in the right direction when searching for your next car- and with 30+ Lending Partners, and hundreds of available vehicles we will get you the best vehicle and deal possible.
Credit is the ability to borrow money or access goods or services with the understanding that you’ll pay later.
Lenders, merchants and service providers (known collectively as creditors) grant credit based on their confidence you can be trusted to pay back what you borrowed, along with any finance charges that may apply.
What does my credit score mean?
Creditors often use a three-digit number known as a credit score as the first step in deciding whether or not to issue credit.
Your credit score distills the information on your credit reports to something that’s easy to interpret, and does so in a fair way that minimizes the possibility of bias.
What is in my credit report?
Information in your credit report includes:
The number of credit card accounts you have, their borrowing limits and current outstanding balances
The amounts of any loans you’ve taken out and how much of them you’ve paid back
Monthly payments for your accounts were made on time, late or missed altogether
More severe financial setbacks (ie. mortgage foreclosures, car repossessions and bankruptcies)
Why do I need credit?
To borrow money for major purchases, such as a car or a home.
Landlords may check your credit when deciding if they’ll rent you an apartment.
Insurance companies may use your credit score as a factor in determining your premiums.
Utility companies may check your credit before deciding to let you open an account or borrow equipment.
How can I build my credit?
To start building credit you’ll need to get your first credit card, line of credit, or loan. Once you’ve done this.
always make your payments on time
make at least the minimum payment if you can’t pay the full amount that you owe
contact the lender right away if you think you’ll have trouble paying a bill
