Episode 23 Transcript – Do and don’t of credit

Hello! You’ve got Jessi Johnson live and today I’m not feeling very good. I’ve had a cold going on now week 2. It sucks because I have no one to cover me. My thought of the day today is I get a lot of questions with regards to credit. What to do and what not to do. What I’m going to do for you in today’s video blog is show you the do’s and don’ts of credit. What I’m going to do is take a clip from one of my first home buyers seminars and walk you through it real quick.

Do’s and Don’ts of Credit:

Do: 

Pay your bills on time.

Keep a small balance on your credit cards. (If you do not spend anything on your line of credit or credit cards you will not be able to incur any credit history or increase any credit scores.)

Watch your credit bureau for mistakes from businesses. (As a broker I can do this for you, either wise I suggest you keep focused on Equifax and Trans Union, the two credit reporting agencies in Canada and make sure there’s nothing on there. There may be businesses, Fido for example, that you may have an old phone bill for $30 that you forgot about from 5 or 6 years ago that may be destroying your credit and you may not even realize it.)

Have at least two trade lines. Examples are:
– Credit card
– LOC (line of credit)
– Car loan (we recommend avoiding this and I’ll get more into that in detail at my seminar or you can simply call me or email me for a response.)
These major trade lines will give you the opportunity to gain your best optimal credit score. Preferably credit cards and lines of credit.

Don’t:

Have too many inquiries. I suggest having only 4 or 5 maximum per year. Any more than that will lower your beacon score.

Miss payments.

Spend too much on your credit cards or line of credit, always keep 20-25% of limit. (No matter how cute he or she is, ha, ha, ha!) So if your credit card limit is $1,000 do not spend more than $750 or $800 or your credit score will start to decrease.

EVER go over your limit on your credit cards or line of credit. It will kill your credit score.

Even with poor credit we can help. I hope that was useful information for you. You can reach me at www.firsthomeinfo.ca and have a good day!