When was the last time you checked your credit score or credit history? It may be important for young and older people alike, for benefits beyond just understanding your credit position.
For older couples, one issue that sometimes arises is when one spouse has a good credit rating, but the other has none: If the spouse with the good rating passes away, the survivor may have difficulty qualifying for credit, such as a loan, or even something as basic as a credit card.
Establishing a good credit score can take time. It involves creating a credit history and showing that you are able to pay bills on time and in full. The two main Canadian credit bureaus, Equifax and TransUnion, keep track of your credit through public records of lenders like banks, collection agencies and credit card companies. Credit scores are usually based on a range between 300 and 900, with a score of over 700 considered very good.
Support Younger Folks: The Importance of Building Credit
Many young people may have limited experience with credit and do not realize that having a good credit history can make life easier. It is important because this score determines how lenders assess an individual’s credit capacity — the higher the score, the greater the likelihood that you’ll be approved for loans or credit. And, it is often checked when applying to rent a property or even for certain jobs.
A Preventative Measure: Protect Against Fraud or Identity Theft
Periodically accessing a credit report may be especially important in this age of increasing fraud and identity theft. A credit report can often detect fraudulent activity, such as identifying accounts you may not have opened or inquiries from companies with which you’ve never done business. The credit bureaus also offer monitoring services that can notify you if there are changes to your credit position, which may indicate fraud. You can also request extra security measures, such as a “fraud alert” to contact you when financial providers issue new credit in your name. Some of these services have associated fees, but the cost may be worthwhile to help minimize any damage if you become a victim, especially as new scams grow in sophistication. They may also be a consideration to help protect those who are more vulnerable, such as isolated and elderly individuals.