ASK THE LADY FOR MONEY: What you need to know about protecting your credit score

Dear Money Lady – I wanted to know if I should agree to give my SIN when I apply for a loan. Should I? Gregory

Dear Greg,

Most people never want to share their Social Insurance Number for fear of being affected by their credit bureau, but unfortunately you may find this necessary when your lender asks you to do so, who must now guarantee identity due increased consumer fraud.

If you apply for credit at a bank, open a bank account, or finance a vehicle, you will likely need to disclose your Social Insurance Number (SIN).

Many people still believe that they should never take a survey or give out their Social Insurance Number too often to get credit. They think their credit will either be damaged or their credit rating and rating will go down. Sometimes that’s not true – so to help you, Greg, I’m going to dispel all the myths and also let you know what the banks are looking for.

There are two major credit bureau companies that all financial institutions and merchants use today. These are Equifax and TransCanada Union – agencies that rank and assign an overall rating to each person who uses credit.

The system for measuring visits to your credit score is indeed intuitive, which means that it measures and assesses the type of merchant and request. So he knows if you are shopping. If you have multiple inquiries from different banks because you are shopping around for rates for a mortgage, you usually won’t see any drop in your score (however, those inquiries must be contained within 30 days).

It’s the same when shopping for a vehicle – multiple visits to your credit bureau from car dealerships will not change the score if they are contained within 30 days.

But, on the other hand, if you really shop and go to different stores, apply for multiple credit cards, personal and retail loans, or buy items with deferred payment plans, then yes that will bring down your score regardless of the 30- day limit.

Protect your credit

First and foremost, you want to protect your credit. It is the foundation of all loans and it is the only way for lenders to judge your creditworthiness for the future. If you always pay your bills on time and have never filed for bankruptcy, the chances are good that you have good credit.

But if you are the opposite and your credit score is too low, it can be very difficult for you to get future credit. Your credit score can range from 300 to 900.

Typically, banks and A lenders look for customers with scores above 680 and will usually automatically deny requests with scores below 600. Credit card companies are a bit more forgiving and will go down to 530, with automatic refusals for scores below 500.

Here are some tips to improve your credit and maintain a good credit rating:

1. Pay your bills two to three days before they are due. Paying them on the due date (especially via online banking) will make you one to two days late. This is recorded on your credit bureau and will definitely lower your score without you knowing it.

2. Do not carry over balances on credit cards or personal loans from month to month. This means that your credit is revolving and will automatically lower your score.

3. Resist the urge to have a lot of open credit cards, even if they have no balances.

4. You must have credit. If you had bad credit and now only use cash, you’re essentially handcuffing your future. Without restoring good credit, the banks will turn you down every time.

5. Property taxes and overdue support payments can also lower your score once they are reported.

6. Overdue mortgage and vehicle payments once reported (which usually happens after 60 days) have a major impact on your score. Please try to avoid this.

I have heard in the past that some traders or banks take small hits on your credit. Please don’t be fooled by this. There is no “soft blow” or “hard blow” to your credit bureau. If they have your verbal consent (even if they don’t have your SIN) when deciding on a consumer credit application, they will take your credit and that will adjust your score.

Good luck and best wishes,

Christine Ibbotson

Written by Christine Ibbotson, author of four books on finance, including the Canadian bestseller “How to Retire Debt-Free & Wealthy”. Go to or send a question to i[email protected]

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