The Mogo Blog

A Newcomer's Guide to Credit Scores in Canada

Credit scores underscore much of Canadian financial health. A good credit score allows you to borrow money for things like mortgages; a bad credit score can bring on higher interest rates and unfavourable loan terms. It’s important to know the ins and outs of credit scores—and building up your own—which can help ensure you’ll be able to participate in Canada’s financial system with the best terms like interest rates. Before we get into it, we’d like to note that while using credit cards can be a good way to build up your credit, it’s extremely important you don’t become over-reliant on them. If you get a credit card, consider using it to pay recurring bills as necessary, not as a free-money-machine, because it’s not that. Do not let your debt add up. Only spend the money you already have. (Product plug, because why not, and also it’s free to order) GO TO MOGOCARD What are Credit Scores?Credit scores, in essence, are risk ratings based on your credit history. These scores are a factor that prospective lenders use to help measure how trustworthy you are with making loan payments. When

3 Reasons Your Credit Score is Dropping

Credit scores underpin the entire credit system in Canada, including everything from credit cards to big loans and mortgages. In order to obtain any such loan, you must be considered trustworthy enough to repay it. The measure? Your score! But there’s a problem: it takes time and attention to get your credit score to a great place. Small mistakes, like missing a payment, or being denied for a loan, can cause your credit to take a serious hit. Damage like that can take months to undo. If you find yourself searching “why is my credit score dropping?” this month, check for these common occurrences and get to work turning that (credit) frown upside down (into a happy credit, you see). This is the most common source of credit score dips across Canada, and it can have the biggest impact on your score. Your payment history includes everything from loan extensions to credit utilization and payments, and these account for 35% of the scoring model which determines your credit score. That’s big! If your credit score dropped this month, double check your statements to make sure you didn’t miss a payment (as a reminder, you should always try

3 ways to improve credit score

Your credit score affects you more than you think — especially when it's time to get approved on exciting life milestones, like buying a car or home. Lenders look at your score to determine your creditworthiness, or how good you are at handling your financial obligations. It’s how they determine how big a mortgage or loan (or how high a credit card limit) to offer you and at what interest rate. Having a low score could result in getting approved at higher interest rates — or even being declined. Many landlords look at your score when considering renting to you, and some employers are even requesting info on your credit score before making you a job offer. A few different factors make up your score, with payment history, utilization ratio, and length of credit topping the list, followed by types of credit and inquiries. Whether your score is stellar or needs some TLC, there are some easy ways to improve it and ultimately rule it. Here are 3 ways to get you started: Nail your utilization ratio Your utilization ratio is how much of your available credit you’re using, or your level of indebtedness. For example, if your credit card

Mogo Presents: Holler For Your Dollar’s 5 Steps to a Rocking Credit Score

Did you know that one of the sexiest holidays of the year happens today? It’s** “Get Smart About Credit Day”**! Excited yet? If not, get ready! Mogo has arranged free access to Holler For Your Dollar’s “5 Steps to a Rocking Credit Score” video. Enjoy! Mogo Presents: Holler For Your Dollar’s 5 Steps to a Rocking Credit Score. *Guest writer: Chantel Chapman* If you thought report cards stopped after graduation- you are wrong. There is another little report card that follows us around into adulthood called the Credit Bureau. And on this credit bureau is your credit score. Your credit score is your financial reputation based on a scoring system. Much like life, if you have a good rep, you’ll be presented with more invites and opportunities. Think of it like this: If you’re late all the time and never answer you friends’ text messages, eventually people won’t want you around. Your credit reputation is the same — if you don’t pay your bills on time or incur more debt than you can handle, your credit score will drop (along with all future opportunities, making car leases/ mortgages/ rental properties increasingly harder to attain)