What is a FICO® Score?

 The FICO® score, developed by Fair, Isaac and Company, Inc (the pioneer in credit scoring) is a number between 300 and 900 that lenders use to determine your credit risk.  A FICO score, referred to as a Beacon Score, is a snapshot of your credit risk at a particular point in time.  The higher your credit score the more likely you are to be approved for loans and receive favorable rates.

Most of Canada’s financial institutions use Beacon Scores to make millions of credit decisions each year.

What is used to calculate my score?

• Payment history – indicates whether you have made your credit card payments, loan payments and other payments on time
• Amounts owed – Compares how much you owe to your credit limits with various lenders.  Credit Cards, Personal Loans and Lines of Credits that are ‘maxed’ out, reflect negatively on your Beacon Score.
• Length of time in file – Indicates how long you have had credit accounts
• New Credit – Shows how often you are looking for new credit and how you handle accounts you have recently opened.  The more inquiries or times a creditor has looked at your bureau reflects negatively on your Beacon Score.  Try to minimize the amount of times you seek out credit and allow different institutions to obtain your credit bureau.
•  Type of Credit – Considers the type of loans you have – car loans, lines of credit, credit card balances

 **Note: Any Mortgage information that may appear in your credit report is not used to calculate your credit score.

What can I do to improve my Credit Score?

Pay all of your bills on time.  Paying late, or having your account sent to a collection agency has a negative impact on your credit score.

Try not to run your balances up to your credit limit.  Keeping your account balances below 75% of your available credit may also help your score.

Avoid applying for credit unless you have a genuine need for a new account.  Too many inquiries in a short period of time can sometimes be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties, or overextending yourself by taking on more debt than you can actually repay. 

Correct inaccurate information.  Equifax encourages all consumers to request and review your credit report on a regular basis.  By doing this, you can ensure that your report contains information that accurately reflects your credit history.  You have the right to dispute any discrepancies by notifying the credit reporting agency. 

How can I correct an inaccuracy in my Equifax credit report?

First you will need to complete a Consumer Credit Report Update Form.  This form can be found at the following link, https://www.econsumer.equifax.ca/ca/view/investigation/investigation.jsp Once complete begin by contacting Equifax.

1. Telephone them at 1 800 465 7166 between 8am and 5pm EST.

2. Write to them at:

Equifax Canada Inc

Consumers Relations Department

Box 190 Jean Talon Station

Montreal, Quebec H1S 2Z2

After they receive your call or letter request, they begin the Dispute Resolution process.  First a review and consideration of the information you have sent them about your dispute is completed.  If the initial review does not resolve the problem, they will continue the investigation.  This involves contacting the submitter of the disputed information on your behalf to review the details.  They will investigate and report their conclusion to Equifax.  Based on the findings, they may make changes to your credit file.  If the disputed information is correct, no changes will be made.

If changes are made a revised credit report with the results of the Dispute Resolution process will be sent to you.   As well, they will also send your revised credit file to any company that requested your credit file 60 days prior to the change.  In some cases it may be a period longer than 60 days.

To find out more about your personal credit score and review your credit bureau, please go to www.equifax.ca

When the Bank of Canada raised its Bank Rate by 25 basis points to 0.75% last Tuesday, there were already a few grumblings from Canadians in the housing sector and elsewhere who thought interest rates should remain at an effective rate of almost zero for time immemorial so they could continue to borrow cheaply. That would be unwise and short-sighted for reasons to be explained.

Of immediate concern is that there are perhaps too many Canadians, at least those under the age of 40, with no historical recollection of how unique the current low-interest rate environment has been and still is.

A bank rate of half a percentage point (and an overnight rate of 0.75%) is unheard of in Canadian history, at least as far back as Bank of Canada records go, which is to 1935. In the depths of the Great Depression, the central bank rate never dipped below 2.5%. In the late 1940s and until 1950, the rate did decline to 1.5%, but never lower.

Click here to read more in the Calgary Herald

Bank of Canada increases overnight rate target to 1/2 per cent and re-establishes normal functioning of the overnight market
OTTAWA – The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1/2 per cent. The Bank Rate is correspondingly raised to 3/4 per cent and the deposit rate is kept at 1/4 per cent, thus re-establishing the normal operating band of 50 basis points for the overnight rate.

The global economic recovery is proceeding but is increasingly uneven across countries, with strong momentum in emerging market economies, some consolidation of the recovery in the United States, Japan and other industrialized economies, and the possibility of renewed weakness in Europe. The required rebalancing of global growth has not yet materialized.

In most advanced economies, the recovery remains heavily dependent on monetary and fiscal stimulus. In general, broad forces of household, bank, and sovereign deleveraging will add to the variability, and temper the pace, of global growth. Recent tensions in Europe are likely to result in higher borrowing costs and more rapid tightening of fiscal policy in some countries – an important downside risk identified in the April Monetary Policy Report (MPR). Thus far, the spillover into Canada from events in Europe has been limited to a modest fall in commodity prices and some tightening of financial conditions.

Activity in Canada is unfolding largely as expected. The economy grew by a robust 6.1 per cent in the first quarter, led by housing and consumer spending. Employment growth has resumed. Going forward, household spending is expected to decelerate to a pace more consistent with income growth. The anticipated pickup in business investment will be important for a more balanced recovery.

CPI inflation has been in line with the Bank’s April projections. The outlook for inflation reflects the combined influences of strong domestic demand, slowing wage growth, and overall excess supply.

In this context, the Bank has decided to raise the target for the overnight rate to 1/2 per cent and to re-establish the normal functioning of the overnight market.

This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in light of the significant excess supply in Canada, the strength of domestic spending, and the uneven global recovery.

Given the considerable uncertainty surrounding the outlook, any further reduction of monetary stimulus would have to be weighed carefully against domestic and global economic developments.