Why your credit score matters when you’re buying a home

With the new mortgage rules coming into effect across Canada, you might be wondering what that means for you—and whether you can still enter the market. One of the new rules applies a stress test to borrowers, which means you need to qualify at a higher rate when you have less than 20% as a down payment. Before these new rules, mortgage borrowers who took a 5-year fixed-rate mortgage only had to qualify for the mortgage payment based on the interest rate they were getting. Now with the new rules, you’d have to qualify for a rate at the Bank of Canada’s 5-year fixed posted rate, which is currently 4.64%. The new rules aim to make sure that if interest rates ever go up and are much higher than they are today, homeowners will still be able to make their payments. But the result is also an approximately 20% decrease in the amount of mortgage money available to borrowers. One factor that you can focus on that is within your control to maximize your affordability: your credit score. A higher credit score could result in a higher mortgage pre-approval amount. Why your credit score matters: Canadian

Credit score tip of the week: Don’t miss payments

Let me tell you a tale… quite possibly a familiar one in your own life. So, Topshop has their annual sale on, which of course I have to hit up. I spot the highly coveted Olivia Palermo bomber jacket which of course just happens to be the last one left and is in my size. I head to the register, bomber in hand, ready to take home my fashion find. As I reach for my wallet, the salesperson tells me I’ll get 15% off if I sign up for the store credit card and use it today. I’m all like, sweet I’ll take it. I charge the $141.33 to my new store credit card, and head off into the sunset. The next day (being the responsible adult that I am) I transfer $140.00 from my bank account onto the store credit card. I’ve got it covered right? A few weeks later, I get a statement in the mail from the store, which I immediately throw in the trash without even opening it. In my mind, I’ve taken care of it. Next month, the same thing happens. Repeat step 1: straight into the trash.

#AskAnAdult: Spending money to make money

This week on #AskAnAdult over at the Kastor & Pollux blog, Meghan Yuri Young asks: “As a freelancer, would it be in my best interest to hire an accountant or a financial advisor? Are they different?” Hey gurl, way to go for being a hustler! One of the biggest mistakes that self-employed people make is that they think they can do ALL the jobs and wear ALL the hats. Not always a kewt look. If you are not great at bookkeeping or finance in general, it may make sense to bring in someone to help you. Experts will cost money but they often save you money overall. Image by Olivia Genovese And yes, accountants and financial advisors are different! A financial advisor is usually someone who sells insurance or investments. On your personal financial portfolio, it may make sense for you to talk to a financial advisor if you’re interested in purchasing life and critical illness insurance to protect you in case anything happens. Unfortunately as a freelancer, we don’t have an employer offering us this benefit but we do have the option to go out and get our own insurance. Also, if you are debt-free, a financial

#AskAnAdult: Getting out of student debt

First adulting question for our Financial Fitness Coach comes from Taylor Reynolds, a photographer / animator / all-around artistic badass who’s asking about student debt. This #AskAnAdult series is going to be a regular feature on the Kastor & Pollux blog, and you'll be able to read it here on the Mogo blog as well. “I’ve been using OSAP while in university and I am starting to stress about how much my debt has been racking up. What are some tips you have when it comes to paying it all off?!” Hey Taylor! First of all, you need to change your perspective on your student loan debt and not feel so guilty about it. Sometimes you need to borrow money in order to purchase an asset and to get yourself ahead in life. Education is an asset. It’s not like you borrowed to pop bottles at the club! Don’t forget, you don’t actually have to pay it off until 6 months after you’re done school, so this means you’ve got 6 months to get your shit together quick! Image by Dani Reynolds If you’re concerned about how big your debt is, get a side

5 ways to make sure money doesn’t ruin your marriage

Our Financial Fitness Coach, Chantel, just wrote an article on the Ottawa Wedding Journal about how to keep it together with your boo while navigating your finances. Check out her 5 Marriage & Money tips: Sorry to break it to you, but when it comes to money honey, you’ve got to bring a business mindset to your marriage. Money issues can be a major reason why marriages fall apart. Like businesses, actually. So while you’re still in the honeymoon phase (aka. when the waters are calm and things are going awesome), you need to lay out a solid plan for how you’re going to handle your finances. The Plan Image by giphy.com 1. Self assess your money situation. Do a credit check on yourself and look into your report in detail to get an idea of where you stand. Identify any issues you’re having and make a plan to pay them back so you’re not bringing them into the relationship. Lead by example. Image by im-hoplessly-devoted.tumblr.com 2. Have an open discussion with your partner about your current financial situation. Have an understanding of each other goals and make sure you’re on

Surprise! Millennials are the #1 fraud victims

You’re more likely to be a victim of fraud than your grandma. According to the Financial Post, “50% of suspect and highly suspect credit application frauds in Canada in 2015 were against Millennials or Generation Y… regarded as anywhere from age 16 to 36.” That’s crazy. Millennials are supposed to be the ones who are on top of technology and know things. (On the other hand, people born before 1944 comprised only 3% of these suspected frauds.) How to protect yourself from fraud Don’t put your real birthdate on Facebook. Fraudsters can start credit applications under your name—sometimes they only need your name, birthday, and address! You can still say your actual birthday because who wants to miss out on all the bday love (obvs) on your wall?? But to prevent someone from getting all of my personal info, I deliberately put the wrong birth-year (1976). CLEARLY I don’t look a day older than 21. But the fraudsters don’t know this lol. Make sure you read before you provide info in apps. For example, like before you buy a filter on a photo app. Sometimes, “in-app purchases” are just a scam to get your

What's a credit score? (And its everyday uses)

Well, first let’s talk about what a credit report is. Your credit report shows your history of borrowing and details on any loans you’ve taken out, as well as other info like how many times you get your credit checked and how close you are to maxing out your balance. Oh yeah, and if you’ve been avoiding those parking tickets or your phone bill from 2011, those get written up in your report too. The score is calculated based on secret algorithms using all the above—and more. It can be a measure of risk for lenders who are thinking about whether they want to offer you credit. Generally, they look at your credit score to judge whether you’d be prone to doing things like not paying your bills on time, maxing out your credit cards, etc. etc. But, if you don’t ever use credit, that could also lower your score as you’re not showing that you’re capable of managing credit like a grownup. Canadians’ credit scores Who’s looking at my credit score? Lenders and Financial Institutions Lenders and financial institutions rely on a credit score and report to determine if you’

Revolving credit: why a loan is smarter than a credit card

You’ve probably been told that credit cards are bad because the interest rate is high. But that’s not the only reason—it’s actually because they’re “revolving credit.” If you’re wondering what the hell revolving credit is, you’re in the right place. Let's ask an adult Revolving credit comes in the form of a credit card or line of credit that lets you immediately re-borrow what you paid back on principal. And many revolving credit products allow you to pay back only the interest. It’s a major reason why so many people find themselves stuck in what feels like an endless cycle of debt. How revolving credit costs you more than a loan The psychology of spending The thing about revolving credit is that it makes it easy and convenient for you to stay in debt. When you pair that with the psychological high of copping the latest pair of shoes / iPhone / whatever your poison is, then it’s not the interest rate you should be worried about anymore. Because let’s face it, whether you get a 5% or 30% rate, you’re probably going to shop and borrow what you paid back

How to improve your credit score and why it matters

One of the awesome things about signing up for a MogoAccount is that you get your credit score for free (paid for by us, provided by Equifax Canada). Oh btw, if you want to get your score somewhere else, be prepared to pony up. Yep, we're basically paying you to get a MogoAccount. 56% of Canadians have never checked their score. Not good. If you're one of them, create your MogoAccount to find out yours now. Knowing your credit score could help you get access to lower loan rates in the future, mortgages—and can be a big part of your dating life. What’s your credit score and where does it fall on the scale of zero to hero? Want to improve your credit score? Here’s what to look for: Fraud or mistakes on your credit bureau. Make sure that everything on the report belongs to you and that the info is correct. If you spot something, it’s time to contact Equifax Canada or Transunion—and do it right away as it can take a while to resolve the issue. An alternative (and quicker way) to get mistakes fixed is to have the creditor who made the

Dating someone with debt: my partner has bad credit, now what?

My friends always ask for my financial fitness advice and it's often around stuff like when they should talk about finances with their partner or how do they tell their spouse about the credit card debt that funded their shoes and booze-filled 20s. Here’s the thing... Your credit report is your financial report card and your credit score is your grade. Together, they show if you've got your life together. Let's say you're in a relationship with someone and the two of you want to buy a house. If your credit rocks and theirs sucks, that might not bode well for your future together. And sure, you're probably not—and you shouldn't be—picking a partner based on their net worth, but it is important to be aligned with someone who has habits and goals that are on your level. I’ve got my own set of advice, but I wanted to find out what people think about a partner’s credit score and if it's really a dealbreaker (or maker). So… I ran this survey and found out the following: So I asked: “When do you think it’s a good time to start having an idea of