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Seven Ways To Damage Your Credit Score ( part 2 )
- Run up high balances
If using too little credit sends up red flags to lenders, using too much credit sends up road
flares and fireworks.
Loading up on high-interest credit cards isn’t a good idea even if the
reward programs are attractive. Lenders want to see people use credit just right -- not too
much, not too little.
It can be damaging to cardholders who run up a high balance every month on one card and
then pay it off each month. Scoring systems do not take those payments into account.
Restrict the amount and sources of your credit. Remember, credit is about a convenient
payment method, so make sure it fits your needs. It should never be used as money you
don’t have.- Apply for new credit repeatedly
lower credit score -- at least in the short run. Multiple hard inquiries in a short period of
time can raise lenders' eyebrows and most banks or credit card companies try to avoid
consumers in these scenarios. Applying for too much credit over a short period of time can
affect your credit rating, so limit the number of credit applications.- Don't pay fines on non-credit-card bills
and bite you if you decide not to pay as agreed. A lot of service providers don't report
positive information. But the minute you do something wrong, they can outsource that debt
to a collection agency who will report it.
Even if you never go over the limit on your credit card, being one day late on a bill can
affect your credit rating. By the way, experts recommend not spending more than 35 per
cent of your allowable credit limit.- Ignore mistakes on your report
your credit report. In order to dispute something on a credit report, one must, of course,
check one's credit report. It's easier than it's ever been as consumers have unfettered
access to their own credit information.
Unlike other issues that affect credit scores, mistakes sometimes can be remedied easily
and quickly, so it's worthwhile to keep tabs on your report. By law, credit reporting agencies
must provide your Consumer Disclosure report, which differs from the credit report lenders
use, if ordered via mail or fax.- Make late payments or skip them entirely
altogether are stellar ways to ensure that your credit score will scrape the bottom of the
barrel.
If you experience cash flow problems or a downfall in your family economic situation for
some time, don’t hide, it’s the worst thing you can do. Instead, call organizations that have
loaned you money. Explain the situation and tell them you want to work out a repayment
plan. Remember, always pay something.
The further back in time the mistakes are, the less impact they have on your credit score.
Obviously, the fewer mistakes consumers make the better for their score.
We hope this information will prove helpful; should you have any further
questions, do not hesitate to call your Mortgage Specialist; he will be happy to
help you. And remember, you always play safer when you build savings; this is,
without a doubt, the best way to have a good night’s sleep.
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Seven Ways To Damage Your Credit Score
As mortgage professionals, we feel it is of the utmost importance to inform our customers
as to the significance of their credit standing and how it affects their capacity to obtain a
mortgage and, even worst, affects the cost of borrowing, especially in these uncertain
economic times. Making some of the following mistakes can ensure that lenders will put on
a hazmat suit to handle your credit report.
Remember the good old days, way back in 2007, when the streets were paved with Credit-
Gold as far as the eye could see and credit cards rained from the sky? Even the credit-
destitute were treated like kings by credit card companies and courted with lavish offers of
unlimited credit.
Here, in the future, the world has changed. And woe betides those who ask for loans with
glaring blemishes on their credit reports. An unpaid collection is apt to be regarded like a
cockroach in the consommé.
What affects your credit score and in what proportion?
35% - Your paying habit
30% - Amounts owed
15% - Lenght of credit history
10% - New credit
10% - Types of credit used
The Seven Pitfalls to Avoid
1. Close credit card accounts
2. Let credit cards collect dust
3. Run up high balances
4. Apply for new credit repeatedly
5. Don’t pay fine on non-credit-card bills
6. Ignore mistakes on your credit report
7. Make late payments or skip them all together
SO, WHAT TO DO?- Close credit card accounts
accounts should be considered for closing. Length of credit history is an important
component of the credit score; therefore, it’s not a good idea to cancel a source that has
been long-held since payment history can have positive implications for your credit rating.- Do not let credit cards collect dust
hoarding them in a shoebox in case of an emergency may also backfire. Consumers
encounter two pitfalls if a creditor closes an account for non-use: The available credit is
pared down and that account no longer contributes to their credit history.
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Housing Market Continue To Rise
New home construction rose by a seasonally adjusted annual rate of 157,300 units in October, up from 149,300 in the previous month, according to Canada Mortgage and Housing Corporation.Economists had expected housing startsto increase by between 155,000 and 158,800 units during the month.
"The improvement in housing starts in October is attributable to improvement in the multiple starts segment," Bob Dugan, CMHC's chief economist, said Monday. "Despite a small decline in single home starts in October, the level of single home starts remains at its second highest level since October 2008."
Urban housing starts rose 5.2% on an adjusted annual basis to 139,900 units last month, with multiple-unit construction jumping 13.8% to 72,600 units. However , urban single-unit starts fell 2.7% to 67,300 units in October.
Overall, urban starts rose by an annual rate of 15% in British Columbia, while they were up 14.8% in Ontario, 6.5% in the Prairies and 1.2% in the Atlantic region. Meanwhile, Quebec saw urban starts fall 11.6%.
Rural starts increased to 17,400 units in October, up from 16,300 the previous month.
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Canadian Economy Rebounding
The stubbornly strong loonie is the major impediment to the Canadian economy rebounding more strongly from the recent deep recession, says Bank of Canada governor Mark Carney.
In a new warning about the currency that is approaching parity with the U.S. greenback, Carney says Canada would experience noticeably stronger recovery next year and in 2011 if the loonie had stayed at the 87-cent level the bank envisaged in the summer.Carney said Thursday that's why the bank made it clear this week that barring an unforeseen spike in inflation, it will keep interest rates at the historic low of 0.25 per cent until at least next July.
Carney said the central bank has several tools at its disposal, including intervention in the currency market, but didn't specify which would be put to use.
"Intervention is always an option," he said.
"Markets should take seriously our determination to set policy to achieve the inflation target. Markets sometimes lose their focus. We don't lose our focus."
The loonie closed 0.16 of a cent lower at 95.44 cents US on Thursday, but many expect it to hit parity with the greenback in the next few months, mainly because of weakness in the American dollar, which has dropped against most of the world's major currencies.
A high loonie makes it cheaper to take U.S. vacations and buy imported goods. But it also harms the Canadian manufacturing sector because it makes exports of everything from minerals and metals to newsprint, machinery and lumber more expensive for buyers in the United States, Canada's main export market.
Carney called the loonie's persistent rise since July "the major downside risk" to the economy, noting that although the loonie was higher two years ago, the difference now is that it comes during a period of severe economic weakness.
His comments came after the central bank issued a comprehensive 28-page quarterly review of the global economy, showing a sharp rebound is underway, fuelled by government stimulus and the need to restock depleted inventories.
But in Canada, the strong burst in activity will last at most a few months more before giving way to the slow and difficult climb back from the deep hole that the recession dug over the past year, the review adds.
The bank is more optimistic about the second half of this year than it was three months ago, noting modest employment gains in August and September.
In a supporting report, Statistics Canada announced that retail sales jumped 0.8 per cent in August to $34.5 billion, largely as a result of strong activity at new car dealerships and at gas stations.
"When the labour market fares well, good things tend to happen to the rest of the Canadian economy," said CIBC economist Krishen Rangasamy.
The domestic economy is now expected to record a two-per-cent gain in the third quarter - the July-September period - and 3.3 per cent during the last three months of this year. The Bank of Canada's July forecast called for growth of 1.3 per cent and three per cent, in the third and fourth quarters respectively.
A number of things have broken right for Canada to make this happen. Commodity prices, particularly oil, have firmed up, financial markets have stabilized faster than thought, and the global economy, particularly China, has rebounded quicker and stronger than expected.
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