Many of us have had life experiences in which we have accumulated debt.   Maybe it was for a wedding, maturity leave, a sick relative, a slow patch in business, a lost job or job change, and sometimes all of these can even happen all at once!   It can feel like a crushing weight on your life and something that you can’t get out of when you have so many payments to make, including a mortgage, car loan, credit cards and lines of credit.

6 out of 10 Canadians are living paycheque to paycheque, so the feeling of being “stretched” is quite common. If you own a home, you may have an opportunity to completely change your situation for the better with a simple restructure of your finances.

Something to consider:  

Mortgage of $400,000.00 2.99% for $1,895.00/month,

$25,000 line of credit at 3.2% for $67.00/month (interest only),

$30,000 Car loan at 0% for $600/month,

$20,000 Credit card at 19% for $400/month,

$15,000 Credit card at 11% for $300/month,

$30,000 Student loan for $700/month.   The Total Monthly Payments Combined are at $ 3,962.00.  

Why not consolidate all of these debts into a low rate mortgage?  The New Monthly Mortgage Payment would be $2,466.00!   THAT’S SAVINGS OF $1,496.00 EACH MONTH!!!

*this is the net benefit after mortgage penalty and new closing costs and is subject to final approval by a lender*.

You might be thinking, “Why would I consolidate a loan that has a 0.00% interest rate?”.

It would be to improve your cash flow so that you can save money every month and cancel the cycle of getting into higher interest rate debt.

If you’re saving $1,496.00 per month, you can put money aside AND pay down your one debt faster (the mortgage), therefore creating a more flexible budget moving forward.

Do you, or someone you care about, want to see if this is a good option?  Our service is free! We can evaluate your options, which would involve a brief conversation and some documentation to confirm that you qualify for a restructure of your finances.

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

Many of us have had life experiences in which we have accumulated debt.   Maybe it was for a wedding, maturity leave, a sick relative, a slow patch in business, a lost job or job change, and sometimes all of these can even happen all at once!   It can feel like a crushing weight on your life and something that you can’t get out of when you have so many payments to make, including a mortgage, car loan, credit cards and lines of credit.

6 out of 10 Canadians are living paycheque to paycheque, so the feeling of being “stretched” is quite common. If you own a home, you may have an opportunity to completely change your situation for the better with a simple restructure of your finances.

Something to consider:  

Mortgage of $400,000.00 2.99% for $1,895.00/month,

$25,000 line of credit at 3.2% for $67.00/month (interest only),

$30,000 Car loan at 0% for $600/month,

$20,000 Credit card at 19% for $400/month,

$15,000 Credit card at 11% for $300/month,

$30,000 Student loan for $700/month.   The Total Monthly Payments Combined are at $ 3,962.00.  

Why not consolidate all of these debts into a low rate mortgage?  The New Monthly Mortgage Payment would be $2,466.00!   THAT’S SAVINGS OF $1,496.00 EACH MONTH!!!

*this is the net benefit after mortgage penalty and new closing costs and is subject to final approval by a lender*.

You might be thinking, “Why would I consolidate a loan that has a 0.00% interest rate?”.

It would be to improve your cash flow so that you can save money every month and cancel the cycle of getting into higher interest rate debt.

If you’re saving $1,496.00 per month, you can put money aside AND pay down your one debt faster (the mortgage), therefore creating a more flexible budget moving forward.

Do you, or someone you care about, want to see if this is a good option?  Our service is free! We can evaluate your options, which would involve a brief conversation and some documentation to confirm that you qualify for a restructure of your finances.

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

Evan Siddall is President and CEO of Canada Mortgage and Housing Corporation.

Finance Minister Bill Morneau announced a broad suite of initiatives on Oct. 3 to ensure that overheated housing markets do not compromise Canada’s economic growth. Canada Mortgage and Housing Corporation welcomes these initiatives and indeed had a hand in developing them with the Department of Finance. Part of our role is to advise the government on housing policy.

Some critics now accuse us of overlooking the “unintended consequences” of our actions. In fact, the results of these policy changes were fully intended.

The federal government requires lenders to buy insurance on mortgages where the buyer has a down payment of less than 20 per cent of the purchase price. Most people who use this support are first-time home buyers.

After the minister’s announcement, a “stress test” using the higher Bank of Canada posted rate must now be used to underwrite guaranteed mortgages. This measure will help offset the highly stimulative effect of low interest rates. Secondly, while lenders are free to offer more flexible terms, the government will no longer guarantee any mortgages on properties valued above $1-million or those with amortizations beyond 25 years. Third, Mr. Morneau also announced some income-tax changes to reduce abuse of the personal exemption from tax on the sale of homes.

By virtue of its role in guaranteeing these mortgages, the government assumes responsibility to ensure the programs support a healthy and growing economy. As such, the rules surrounding mortgage loan insurance have been tightened six times since 2008 in order to reduce housing-market risks. The IMF and OECD, among others, had called for additional action. The announcement was a further response and also proposed discussions on how these risks should be shared in the future.

Action was needed. The level of household indebtedness in Canada is now at a historic high of 168 per cent of disposable income. The Bank of Canada calls this factor the greatest vulnerability to our economy. The bank has highlighted growing debt levels among the most vulnerable homeowners as a particular cause for concern. This includes many first-time home buyers with less job tenure and higher demands on their pocket books.

Concerns about elevated prices in Vancouver and Toronto are well-known. Affordability pressures hurt lower-income households the most and cause real socioeconomic consequences. CMHC has recently observed spillover effects from Vancouver and Toronto into nearby markets. These factors will be reflected in our forthcoming Housing Market Assessment on Oct. 26. They will cause us to issue our first “red” warning for the Canadian housing market as a whole.

High levels of indebtedness coupled with elevated house prices are often followed by economic contractions. In their book House of Debt, economists Atif Mian and Amir Sufi called the relationship “so robust as to be as close to an empirical law as it gets in macroeconomics.” The conditions we now observe in Canada concern us.

These changes will both reduce home buyers’ ability to borrow and increase lenders’ funding costs. We expect mortgage rates to increase modestly in response. Our government-backed mortgage funding has encouraged some unhelpful mortgage-lending activities. These business models will have to change since government should not be supporting lending that threatens our economic stability.

We expect Mr. Morneau’s actions therefore to support our economy. Seen this way, the resulting delay in when people can purchase their first home, or their decision to buy a smaller home, rent or stay put is rather a small price to pay. And tighter lending standards will limit price increases, ultimately making houses more affordable. 

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

Evan Siddall is President and CEO of Canada Mortgage and Housing Corporation.

Finance Minister Bill Morneau announced a broad suite of initiatives on Oct. 3 to ensure that overheated housing markets do not compromise Canada’s economic growth. Canada Mortgage and Housing Corporation welcomes these initiatives and indeed had a hand in developing them with the Department of Finance. Part of our role is to advise the government on housing policy.

Some critics now accuse us of overlooking the “unintended consequences” of our actions. In fact, the results of these policy changes were fully intended.

The federal government requires lenders to buy insurance on mortgages where the buyer has a down payment of less than 20 per cent of the purchase price. Most people who use this support are first-time home buyers.

After the minister’s announcement, a “stress test” using the higher Bank of Canada posted rate must now be used to underwrite guaranteed mortgages. This measure will help offset the highly stimulative effect of low interest rates. Secondly, while lenders are free to offer more flexible terms, the government will no longer guarantee any mortgages on properties valued above $1-million or those with amortizations beyond 25 years. Third, Mr. Morneau also announced some income-tax changes to reduce abuse of the personal exemption from tax on the sale of homes.

By virtue of its role in guaranteeing these mortgages, the government assumes responsibility to ensure the programs support a healthy and growing economy. As such, the rules surrounding mortgage loan insurance have been tightened six times since 2008 in order to reduce housing-market risks. The IMF and OECD, among others, had called for additional action. The announcement was a further response and also proposed discussions on how these risks should be shared in the future.

Action was needed. The level of household indebtedness in Canada is now at a historic high of 168 per cent of disposable income. The Bank of Canada calls this factor the greatest vulnerability to our economy. The bank has highlighted growing debt levels among the most vulnerable homeowners as a particular cause for concern. This includes many first-time home buyers with less job tenure and higher demands on their pocket books.

Concerns about elevated prices in Vancouver and Toronto are well-known. Affordability pressures hurt lower-income households the most and cause real socioeconomic consequences. CMHC has recently observed spillover effects from Vancouver and Toronto into nearby markets. These factors will be reflected in our forthcoming Housing Market Assessment on Oct. 26. They will cause us to issue our first “red” warning for the Canadian housing market as a whole.

High levels of indebtedness coupled with elevated house prices are often followed by economic contractions. In their book House of Debt, economists Atif Mian and Amir Sufi called the relationship “so robust as to be as close to an empirical law as it gets in macroeconomics.” The conditions we now observe in Canada concern us.

These changes will both reduce home buyers’ ability to borrow and increase lenders’ funding costs. We expect mortgage rates to increase modestly in response. Our government-backed mortgage funding has encouraged some unhelpful mortgage-lending activities. These business models will have to change since government should not be supporting lending that threatens our economic stability.

We expect Mr. Morneau’s actions therefore to support our economy. Seen this way, the resulting delay in when people can purchase their first home, or their decision to buy a smaller home, rent or stay put is rather a small price to pay. And tighter lending standards will limit price increases, ultimately making houses more affordable. 

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

1. Make a double mortgage payment whenever you can. Doing this once a year can shave over 4 years off the mortgage! Sometimes you can skip a payment later on too…if you really, really need to. Try not to. If your payment is $2,000 a month, four years of no payments is $96,000!!

2. Increase frequency of payment. For Example going from monthly to bi-weekly accelerated can shave over three years off your mortgage! $2,000, three years of no payments is $72,000!!

3. Increase your payment. For example a one-time 10% increase can shave 4 years off the mortgage. That’s $96,000! Imagine if you bumped the payment 10% every year from the get go!!! You would be mortgage free in 13 years! Start to finish! Can’t do it? How about 5% every year….you would be mortgage free in 18 years! How about increasing the payment by the amount of your annual raise?

4. Lump sum payments…same idea…mortgage is gone way faster! Even just one payment a year equivalent to 1 monthly payment will give you similar results as #2 above! How about using your annual work bonus?

5. Renegotiate whenever rates drop to save interest and pay mortgage faster! Generally a good idea however *Caution* get independent professional advice (a cost benefit analysis) to make sure it makes sense for you at that time. I can help. A 1% reduction on a $300,000 mortgage will save $250 a month…times 5 years…that’s $15,000!!

6. Keep your credit rating high for best rate. Always pay on time. Never let payments slip past their due date. Always keep balances low in relation to credit limits on credit cards, lines of credit, etc. 50% or less is best even if you pay the balances in full every month. What generally reports to the credit bureau is the statement balance each month. So if your credit limit is $3000 and you are running $3000 a month through the card each month (to collect all those points you never spend or can’t use in blackout periods) and paying in full, it will look like you are maxing out your credit limit and your credit score will drop accordingly.

7. Increase your mortgage! Yeah I know sounds backwards! Do it to roll in your credit cards, line of credit, car loan etc for a better rate and a set payment plan. Oh you say you don’t want to extend the repayment period of that stuff by rolling it into your mortgage or you have a low or promo rate credit card (those never end well) I agree! Then keep the total payment amount the same but pay it in one neat monthly payment to the increased mortgage.

8. Make an RRSP contribution and use the refund to pay down your mortgage.

9. Go variable rate with your mortgage but keep payments as if fixed rate. Variable rates usually win out over fixed rates. By paying a higher payment you will pay off the mortgage faster. It’s also a buffer in case the rate rises above the fixed rate for short periods of time. *Caution* variable rates are not for everyone. Get independent professional advice to find out what is best for you. I can help!

10. Take your mortgage with you when you change properties to avoid penalty or higher rate on a new mortgage. This is called “porting”. Make sure that your mortgage has this feature. It is not widely known and could save you a ton of dough.

11. Set up auto savings every paycheque, even $10, when it reaches the amount of one mortgage payment, apply it to the mortgage. This concept goes nicely with #4 above.

12. Unhook from the money drip…stop paying with your fancy points credit or debit card. Way too easy to overspend! Go old school, go off the grid…PAY CASH, it works!

13. Don’t ever buy on layaway, you know, six months don’t pay schemes. You think…No problem I’ll just pay it in six months, it will be okay. Yeah right!

14. Downsize your house. Two good friends and clients of mine, having followed many of the tips here, are in great shape except they have a six bedroom house! Two people, six bed house – go figure! They are nearly debt free so no biggy, but can you say the same? Circumstances change, make the adjustments along the way!

15. Don’t want to move? Convert the basement/rooms to rental and use the income to pay down debt.

16. Convert your mortgage to tax deductible. If you are self-employed, own rental property or have investments, this is likely possible. I won’t go into details here, just ask me how.

17. Have a payment priority.

18. Pay off the highest interest rate first.

19. If you have tax deductible loans, pay them off last, slowest. Pay the non-tax deductible loans first and fastest.

20. Pay off ugly debt first. Stuff like credit card purchases.

21. Payoff bad debt next. Stuff like car loans, boat loans. Things that depreciate in value.

22. Pay off good debt (or shall I say “not so bad debt”) last. Stuff like mortgages, investment loans. Things that hopefully appreciate in value.

23. Buying a car? Finance it if you have to, don’t lease! *Exception* If you are self-employed it might make sense.

24. You have $20,000 in a secret bank account for a rainy day fund and $20,000 owing on a line of credit. Seriously? The bank account is paying you next to nothing (which is taxable income to boot) and the line of credit rate is way higher (and not tax deductible). You know what to do. You can keep the line of credit open and on standby for rainy day funds. Make it the secret line of credit that you have but never use.

25. Give your Banker more money. No really. Keep enough in your chequing account to meet the minimum requirement to waive your service charges. My bank charges $10 a month for 25 transactions and nothing, zero, zilch, zip if I keep $2,500 in the account. Let’s see $10 x 12 is $120 a year to pay off debt. I’d have to earn 5% with the $2,500 in my savings account to come out ahead. No brainer here. Oh yeah, if you need more than 25 transactions a month…see #12 above.

26. #26? BONUS TIP and MOST IMPORTANT. Let’s face it, you’re not the Government and you’re not a Bank, you can’t run deficits forever and you won’t get a bailout….stop procrastinating already! See 1 through 24 above and take action now!

Sidenote: *Caution* beware of some too good to be true ultra-low rate mortgages. These “no frills” mortgages are often loaded with restrictions like pre-payment limitations, fully-closed terms, stripped-out features, or unusual penalties. You really need to compare product to product. If you’re not looking at what you’re giving up, you may regret it in the future. This alone could prevent you from taking advantage of tips #1, 2, 3, 4, 5, 7, 8, 9, 10, 14, 16 and 22!

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

1. Make a double mortgage payment whenever you can. Doing this once a year can shave over 4 years off the mortgage! Sometimes you can skip a payment later on too…if you really, really need to. Try not to. If your payment is $2,000 a month, four years of no payments is $96,000!!

2. Increase frequency of payment. For Example going from monthly to bi-weekly accelerated can shave over three years off your mortgage! $2,000, three years of no payments is $72,000!!

3. Increase your payment. For example a one-time 10% increase can shave 4 years off the mortgage. That’s $96,000! Imagine if you bumped the payment 10% every year from the get go!!! You would be mortgage free in 13 years! Start to finish! Can’t do it? How about 5% every year….you would be mortgage free in 18 years! How about increasing the payment by the amount of your annual raise?

4. Lump sum payments…same idea…mortgage is gone way faster! Even just one payment a year equivalent to 1 monthly payment will give you similar results as #2 above! How about using your annual work bonus?

5. Renegotiate whenever rates drop to save interest and pay mortgage faster! Generally a good idea however *Caution* get independent professional advice (a cost benefit analysis) to make sure it makes sense for you at that time. I can help. A 1% reduction on a $300,000 mortgage will save $250 a month…times 5 years…that’s $15,000!!

6. Keep your credit rating high for best rate. Always pay on time. Never let payments slip past their due date. Always keep balances low in relation to credit limits on credit cards, lines of credit, etc. 50% or less is best even if you pay the balances in full every month. What generally reports to the credit bureau is the statement balance each month. So if your credit limit is $3000 and you are running $3000 a month through the card each month (to collect all those points you never spend or can’t use in blackout periods) and paying in full, it will look like you are maxing out your credit limit and your credit score will drop accordingly.

7. Increase your mortgage! Yeah I know sounds backwards! Do it to roll in your credit cards, line of credit, car loan etc for a better rate and a set payment plan. Oh you say you don’t want to extend the repayment period of that stuff by rolling it into your mortgage or you have a low or promo rate credit card (those never end well) I agree! Then keep the total payment amount the same but pay it in one neat monthly payment to the increased mortgage.

8. Make an RRSP contribution and use the refund to pay down your mortgage.

9. Go variable rate with your mortgage but keep payments as if fixed rate. Variable rates usually win out over fixed rates. By paying a higher payment you will pay off the mortgage faster. It’s also a buffer in case the rate rises above the fixed rate for short periods of time. *Caution* variable rates are not for everyone. Get independent professional advice to find out what is best for you. I can help!

10. Take your mortgage with you when you change properties to avoid penalty or higher rate on a new mortgage. This is called “porting”. Make sure that your mortgage has this feature. It is not widely known and could save you a ton of dough.

11. Set up auto savings every paycheque, even $10, when it reaches the amount of one mortgage payment, apply it to the mortgage. This concept goes nicely with #4 above.

12. Unhook from the money drip…stop paying with your fancy points credit or debit card. Way too easy to overspend! Go old school, go off the grid…PAY CASH, it works!

13. Don’t ever buy on layaway, you know, six months don’t pay schemes. You think…No problem I’ll just pay it in six months, it will be okay. Yeah right!

14. Downsize your house. Two good friends and clients of mine, having followed many of the tips here, are in great shape except they have a six bedroom house! Two people, six bed house – go figure! They are nearly debt free so no biggy, but can you say the same? Circumstances change, make the adjustments along the way!

15. Don’t want to move? Convert the basement/rooms to rental and use the income to pay down debt.

16. Convert your mortgage to tax deductible. If you are self-employed, own rental property or have investments, this is likely possible. I won’t go into details here, just ask me how.

17. Have a payment priority.

18. Pay off the highest interest rate first.

19. If you have tax deductible loans, pay them off last, slowest. Pay the non-tax deductible loans first and fastest.

20. Pay off ugly debt first. Stuff like credit card purchases.

21. Payoff bad debt next. Stuff like car loans, boat loans. Things that depreciate in value.

22. Pay off good debt (or shall I say “not so bad debt”) last. Stuff like mortgages, investment loans. Things that hopefully appreciate in value.

23. Buying a car? Finance it if you have to, don’t lease! *Exception* If you are self-employed it might make sense.

24. You have $20,000 in a secret bank account for a rainy day fund and $20,000 owing on a line of credit. Seriously? The bank account is paying you next to nothing (which is taxable income to boot) and the line of credit rate is way higher (and not tax deductible). You know what to do. You can keep the line of credit open and on standby for rainy day funds. Make it the secret line of credit that you have but never use.

25. Give your Banker more money. No really. Keep enough in your chequing account to meet the minimum requirement to waive your service charges. My bank charges $10 a month for 25 transactions and nothing, zero, zilch, zip if I keep $2,500 in the account. Let’s see $10 x 12 is $120 a year to pay off debt. I’d have to earn 5% with the $2,500 in my savings account to come out ahead. No brainer here. Oh yeah, if you need more than 25 transactions a month…see #12 above.

26. #26? BONUS TIP and MOST IMPORTANT. Let’s face it, you’re not the Government and you’re not a Bank, you can’t run deficits forever and you won’t get a bailout….stop procrastinating already! See 1 through 24 above and take action now!

Sidenote: *Caution* beware of some too good to be true ultra-low rate mortgages. These “no frills” mortgages are often loaded with restrictions like pre-payment limitations, fully-closed terms, stripped-out features, or unusual penalties. You really need to compare product to product. If you’re not looking at what you’re giving up, you may regret it in the future. This alone could prevent you from taking advantage of tips #1, 2, 3, 4, 5, 7, 8, 9, 10, 14, 16 and 22!

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

It’s that time of year again when property taxes are coming due. Did you know that the average homeowner saves $570.00 with the home owners grant?

On the bottom of your property taxes you will notice a section called “Home Owner Grant Application”. Make sure you take the time to fill that out!

It’s that time of year again when property taxes are coming due. Did you know that the average homeowner saves $570.00 with the home owners grant?

On the bottom of your property taxes you will notice a section called “Home Owner Grant Application”. Make sure you take the time to fill that out!

Your Credit scores are like report cards for grown‐ups. The score you get ranges from 300 to 900. Your score indicates your creditworthiness to potential lenders, banks, landlords, insurance companies, and even to some employers. The higher your score the better.

1. GET A COPY OF YOUR CREDIT REPORT Make an inquiry once a year, twice is much better. If you are planning on purchasing anything that requires a credit check, keep track of your credit. This is something that is 100% in your control. As a consumer you have ability to make a soft/consumer inquiry to Equifax as many times as you want without it affecting your score. If something doesn’t look right, contact the creditor immediately. Don’t wait to report an incorrect or fraudulent transaction. Is there an outstanding collection? If so, deal with it immediately, and by that I mean pay it. Then argue to get your money back. Do not leave this on your credit report hoping that it will disappear. No matter what, the collection will not be removed until it’s paid unless taken to litigation. Once dealt with, it will still take months to recover the points lost and 6 years to fall off your credit report.

2. NEVER MISS A MINIMUM PAYMENT Because this attributes to 35% of your overall score, delinquencies have the biggest negative effect on your credit score. If you have overdue bills, make the necessary arrangements with your creditors. They would much rather work with you than file collections against you. If you can’t pay it all back, it’s better to pay some.

3. DON’T CLOSE UNUSED CREDIT CARD ACCOUNTS Got a credit card that you have had ten years and hardly use? Keep it. It takes 12 years of history with the same specific card in good standing to crack 800 and enter that top 2% tier of quality credit. Cancelling a card can actually lower your score. Keep the old cards and only use them occasionally so the issuer doesn’t stop reporting your information to the credit bureaus. Having a long credit history helps increase your score. Don’t jump around to credit providers. Most ‘large’ providers have several different products. There is likely one that will fit your needs.

4. NEVER MAX OUT YOUR CREDIT CARDS A good rule of thumb when considering building your credit is to keep the balance at or below 30% of the limit. Furthermore, a balance of 50% of the limit will maintain existing levels and over 75% will start to decrease it. NEVER exceed the limit, by even a $1.

5. DON’T LOOK FOR MORE CREDIT Don’t shop around for credit or open several credit accounts in a short period of time. It raises alarms at credit bureaus and financial institutions, especially when you don’t have a long‐established credit history. Work with your existing creditors, as there is more relevant history. They are more likely to work with you, especially if you are looking to resolve some credit hardship(s). Always ensure you give your permission before allowing a credit check.

6. RULE OF 2 Ideally, you want to have 2 sources of credit solely in your own name for a minimum of 2 years with at least a $2,500 credit limit. This would be either 2 credit cards or one credit card and a line of credit. Ensure this is in addition to any joint accounts. Joint credit is only reported to the primary credit holders credit bureau and will not have any positive effect on the co-account holder.

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

http://www.consumer.equifax.ca/home/en_ca

Your Credit scores are like report cards for grown‐ups. The score you get ranges from 300 to 900. Your score indicates your creditworthiness to potential lenders, banks, landlords, insurance companies, and even to some employers. The higher your score the better.

1. GET A COPY OF YOUR CREDIT REPORT Make an inquiry once a year, twice is much better. If you are planning on purchasing anything that requires a credit check, keep track of your credit. This is something that is 100% in your control. As a consumer you have ability to make a soft/consumer inquiry to Equifax as many times as you want without it affecting your score. If something doesn’t look right, contact the creditor immediately. Don’t wait to report an incorrect or fraudulent transaction. Is there an outstanding collection? If so, deal with it immediately, and by that I mean pay it. Then argue to get your money back. Do not leave this on your credit report hoping that it will disappear. No matter what, the collection will not be removed until it’s paid unless taken to litigation. Once dealt with, it will still take months to recover the points lost and 6 years to fall off your credit report.

2. NEVER MISS A MINIMUM PAYMENT Because this attributes to 35% of your overall score, delinquencies have the biggest negative effect on your credit score. If you have overdue bills, make the necessary arrangements with your creditors. They would much rather work with you than file collections against you. If you can’t pay it all back, it’s better to pay some.

3. DON’T CLOSE UNUSED CREDIT CARD ACCOUNTS Got a credit card that you have had ten years and hardly use? Keep it. It takes 12 years of history with the same specific card in good standing to crack 800 and enter that top 2% tier of quality credit. Cancelling a card can actually lower your score. Keep the old cards and only use them occasionally so the issuer doesn’t stop reporting your information to the credit bureaus. Having a long credit history helps increase your score. Don’t jump around to credit providers. Most ‘large’ providers have several different products. There is likely one that will fit your needs.

4. NEVER MAX OUT YOUR CREDIT CARDS A good rule of thumb when considering building your credit is to keep the balance at or below 30% of the limit. Furthermore, a balance of 50% of the limit will maintain existing levels and over 75% will start to decrease it. NEVER exceed the limit, by even a $1.

5. DON’T LOOK FOR MORE CREDIT Don’t shop around for credit or open several credit accounts in a short period of time. It raises alarms at credit bureaus and financial institutions, especially when you don’t have a long‐established credit history. Work with your existing creditors, as there is more relevant history. They are more likely to work with you, especially if you are looking to resolve some credit hardship(s). Always ensure you give your permission before allowing a credit check.

6. RULE OF 2 Ideally, you want to have 2 sources of credit solely in your own name for a minimum of 2 years with at least a $2,500 credit limit. This would be either 2 credit cards or one credit card and a line of credit. Ensure this is in addition to any joint accounts. Joint credit is only reported to the primary credit holders credit bureau and will not have any positive effect on the co-account holder.

Shari Letsos
Mortgage Professional
Cell: 604-723-7721
Sletsos@dominionlending.ca
Dominion Lending Centres Mountain View
Website: www.ShariLetsos.ca

http://www.consumer.equifax.ca/home/en_ca