How To Manage Your Credit Report

Posted Sunday, May 16th, 2010. Filed Under Financial Empowerment

Jay and Joan have provided their tips and tools on Managing Your Credit Report. It is about keeping a good credit score.

There is a volume of information. I encourage you to go through this many times. Write down your questions and call Jay and/or Joan if you need clarity.

I have referred many times to the “closet theme”. In this case it is about “refreshing your closet every year” – know where you are at. When you shop – you can use a credit card – then pay it off at the end of the month. Stuffing your closet with things you do not need and will never wear (remember Carrie in Sex in The City – movie 1) for this is not a good use of your credit card and likely will lead to a bad score – for how will you pay off all that debt. Make it manageable.

Enjoy the wisdom shared below:

“How to manage your credit report”
Or
“Why does having a high credit score presume I am honest and I will pay back a loan? How do I manage my score?”

Spring is here and Toronto is busting with festivals; Blues Festival, Jazz Festival, Rock Festival, Family Festivals, and Children Festivals
My summer of festivals becomes a lot less festive when purchasing a condo – my very first 836 sq. ft. space in Toronto that I can call my own.
Fellow readers and friends, I don’t have enough cash in the bank to pay for the condo so I had to borrow it.
Lenders determined my credit worthiness:
• not because of my integrity.
• not because I am a Toastmaster.
• not because I am a nice guy.
• not because of my professionalism.
• not only because of my income.
They based it on a score, not a test score, my credit score.
My parents always told me to be honest and manage your credit report.
To me, honesty is important but it has very little to do with having a high credit score, it is being more practical than honest.
Having a good credit report means that you know how to manage your credit report.
Having good credit makes life easier.
Things go more smoothly.

Friends I am writing today to give you the unwritten rules of managing your credit report.
In North America, it is our baseball card. It’s our business scorecard.
#1 Get credit by obtaining:
1. 2 credit cards (Visa, MC, or American Express)
2. 1 store card (Best Buy, Canadian Tire, any retail store card)
3. Instalment account (home renovation or personal loan)
4. Car loan/lease
5. LOC/HELOC (Lines of credit or Home Equity Lines of Credit)
• Notice I didn’t mention mortgages, because mortgages are not on your credit report (Canada only)
#2 Use all credit cards at least once every 2 months.
1. even in small amounts, and
2. pay it off at end of month
#3 By using one credit card and pushing it to the limit actually has a detrimental effect on your credit score.
#4 If you have to keep a balance for a month, stay below 49% of the limit.
#5 Do not cancel credit cards.
#6 If you have to cancel start with the latest and work your way down.
#7 Do not pay your credit card balance more than 28 days late.
#8 Have Identification verified before checking credit – set it up with equifax.ca and transunion.ca.
#9 A good rule of thumb when shopping for a mortgage/automobile is to have three banks only check your credit on the same day.
#10 If you need to pay your balance late, borrow the payment.
#11 Check your credit report every year.
#12 Check property title every 4 years to ensure information is correct and updated.
#13 Apply for credit when you don’t need it.
#14 Keep documents even after you have paid off any loan
#15 Always use the same full name .
#16 Become knowledgeable of identity theft prevention.
#17 Don’t negotiate a settlement on a debt for less than what you owe.
#18 Set aside a minimum of 6 months income or expenses in an emergency fund
#19 Think of your credit with every business transaction.
#20 Protect your credit.
The above rules of managing your credit report come as a result of interviewing thousands of credit holders and many years of experience managing them.
Having a good credit score will allow you to access money at a very low cost. In turn, when an opportunity arises, you are well positioned to take advantage.

Sincerely,
Jay F. Llave and Joan Morrow
Jay – 416-545-5317
Joan – 416-545-5352

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