The Mogo Blog

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

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

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