How to Get the Lowest Rates by Optimizing Your Credit Score

Your credit score is a very important thing to manage as it lets you get the lowest possible rates on your mortgage, car loans, lines of credit, and any other debt that you may wish to take on now and in the future.

In Canada, the best loans with the best terms are reserved for people with high credit scores. So, even if you don’t need any sort of loan now (like a mortgage, car loan, or a line of credit), it is something that you should keep an eye on and strive to improve, as you don’t want to be overcharged on interest payments if you ever do need some financing.

Even though we no longer have a mortgage or any debt, I still use a free tool to monitor my own credit score, just to ensure that the best loans are available to me in case I ever need them, and to help protect myself against identity fraud.

For example, if somebody got a hold of my credentials and tried taking out credit cards or loans in my name, I can quickly catch that and report it, instead of letting them gradually destroy my credit score over time.

I like sharing the apps and tools that I personally use on the podcast and the free tool that I use to do all of this is called Borrowell. So today on the show, I brought on the CEO of Borrowell, Andrew Graham so that I can ask him some questions after using his tool for almost a year.

We cover things like:

• How to increase your credit score
• The key things that can cause our score to decline
• How to read the credit report so you can see if there are any issues
• How to fix issues on our credit report that are negatively impacting our credit score
• and much more.

Resources and Links Mentioned:

• The tool that I use to check and monitor my credit score for free is over at Borrowell.
• You can learn more about Borrowell Boost here.
• Free tickets to the Canadian Financial Summit: To get the free tickets, just sign up anywhere on the main page of BuildWealthCanada.ca and I'll email them to you once they are ready.

Questions Asked:

1. Your company offers free credit scores and reports from Canada’s largest credit bureau, Equifax. For anybody completely new to all of this, who is Equifax and why should we care? 
2. To help further answer the question of why we should even care about our credit score; from your experience, how big of a difference have you seen in the interest rate offered to Canadians who have a low vs a high credit score?
3. Many of us have heard about how if our credit score gets checked too much by companies, it can actually lower our credit score. This leads us to the subject of hard vs soft inquiries. Can you talk about what those are?
4. If we need a loan and are shopping around, how do we ensure that we don’t get too many hard inquires?
5. I’ve been using your tools for a while now and one of my favourite time-saving ones is how you automatically calculate our credit utilization score. Can you explain what that is and what credit utilization score we should aim for?
6. Does our credit score improve the lower our credit utilization percentage is to 0%? Or do we really just need to ensure that we’re under the specific number?
7. When we receive our credit report (whether it’s through you guys or someone else), what specifically should we be looking for and analyzing while going through it?
8. I realize your tool actually does custom suggestions on how to improve our credit score once it pulls our information, but what are some best practices that anybody can apply when it comes to increasing our credit score?
9. At what point is our credit score in that top tier where we are already getting the best possible rate and so it’s not worth the effort in trying to improve it any further?
10. How important is it to close down accounts that we still have open but don’t use anymore? (ex. credit cards, lines of credit, etc.)
11. If there is an error or discrepancy on our credit report, what’s the best recourse that we have as Canadians? Ex. do we contact Equifax? Do we contact the company that put that blemish on our credit report and ask them to fix it?
12. If somebody has no loans and doesn’t use credit cards, is that actually bad if you ever do need a loan since lenders want to see that credit history? (ex. A homemaker where their spouse does all the purchasing and their debts are under the working spouse’s name?)
13. I’m a big fan of online tools that help me optimize and manage my finances, and you guys have one coming out that I’m pretty excited to try out. Can you talk about the new Borrowell Boost app that you have and what it does?

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