There are many things that we should have been taught in school and monitoring your credit score is one of them. I certainly remember an era when checking your credit score without affecting it was impossible and I would just hope for the best when I needed a loan. However, there are now many ways to check your credit score and to stay on top of it. Let me introduce you to Borrowell; I’ve been using their services for over a year now and I am obsessed with my credit score!
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What is Borrowell?
Borrowell is the first company in Canada to provide Canadians with their credit score and reports FOR FREE.
They offer the ability to track your score every week, as well as financial product recommendations based on your credit, a Credit Coach, and more to help you with your financial health, on a one-stop user-friendly app.
Borrowell thinks it should be easier for Canadians to understand the value of their credit, so they can be confident and in control of their finances.
With its free credit score and report monitoring, personal loans, and financial product recommendations, Borrowell empowers Canadians to improve their financial well-being and be the hero of their credit.
They are here to help people make great decisions about credit.
Why should you check your credit score?
If you don’t know what a credit score is, Borrowell has a very interesting article on their blog about it.
Your credit score is impacted by many things, from your credit utilization to having a financial institution checking it for a loan.
Every time you ask a financial institution to check your credit score, it affects it. When you miss a payment, it affects it negatively. Every time you pay on time, it improves it.
Your credit score will vary between 300 and 900, with 300 being the lowest score and 900 the highest.
You should always aim to be above 700. However, if your score is between 600 and 712, it is considered fair. And if it is above 741, it is considered excellent.
Having a good credit score will enable you to have better terms and conditions for loans if you ever need one (i.e. mortgage, car loan, etc.).
Watch out for fraudsters
You should also keep an eye on your credit score to find out if your name is used for fraudulent activities.
If your credit score starts plummeting for no reason (and you are certain you are paying your bills on time), it could be because you are the victim of fraud.
Real-life example
When I was a teen, long after my parents separated, my mother started getting letters from a bank at my father’s address, where she never resided. They were addressed to her name but she wasn’t dealing with this specific bank.
When she applied for her first mortgage, her application was declined because she had a bad credit score, late payments, and tons of loans. My mom was very confused because, while she wasn’t rich, she was paying everything on time.
She asked her credit report to Equifax and she found out someone was using her name to get loans.
After a long investigation, I believe the person was prosecuted and the fraudulent loans were removed from her file but it took her a lot of time and energy to get to the bottom of this.
By regularly checking your credit score, which wasn’t available at that time, she could have found out quickly that she was the victim of a fraudster.
How I badly affected my credit score
When I applied for a mortgage to buy my first house, I learned that my credit score wasn’t good because I had a problem several years earlier with my student loan that had badly affected my score.
I was young and careless and didn’t care about paying back my student loan, so my account was taken to the collection services (to be fair, I had moved out of my parents’ house and forgot to update my contact info, so the bank couldn’t contact me).
Young Val was also careless with her credit card. I didn’t understand the consequences of using a credit card to buy myself stuff. I wouldn’t pay off the balance each month, and I wasn’t aware of the minimum payment due dates.
Because of this situation, my application for a mortgage was almost declined. I got lucky because I had a good job, and the financial institution took under consideration my student loan story (and the fact that it had been paid in full for years).
Back then, checking your credit score for free was not a thing; you had to call Equifax or TransUnion, pay for the request, and it would affect your credit score.
Had I been able to check my credit score regularly, I would probably have been more careful with it.
Be the hero of your credit
Your financial well-being doesn’t depend on how much money you make; it depends on how well you manage it.
Borrowell taught me my credit utilization should remain under 30%. I didn’t know that. It’s okay to use your credit card or have loans, as long as you ensure to pay the balance, or at least the minimum payment every month.
How can you improve your credit score?
The trick to having a good credit score is to simply pay your bills on time.
If you make purchases with your credit card, ensure to pay back the balance before the end of the cycle (usually about 30 days).
If you can’t afford to pay off the balance entirely, you need to pay at least the minimum payment (typically $10 or 3% of the balance, whichever is the highest). But you should always aim to pay it off entirely every month.
Missing even one payment will negatively affect your credit score.
Note your minimum payment due dates in your calendar, your agenda, or in a notebook; anywhere that is convenient for you to make sure you pay your bills on time.
For example, I entered every single bill I need to pay in my Google Calendar. Everything you see in red is a bill. I have set reminders for the day before for each one of them to make sure I don’t forget them.
My journey to improve my credit score
As I told you in the post New Year Resolution: Working on Your Finances, I am currently in the process of getting entirely out of debt. My credit score was rapidly decreasing and it was freaking me out.
I sat down with my financial counselor and she created a budget for me, allocating every penny possible to paying off my debts (credit card and line of credit) while paying for my regular living expenses.
I started the process in early December, and in a matter of weeks, my credit score improved by 93 points! That’s gigantic!
By simply paying a bit more than the minimum payments required, on time, my credit score started going up again.
Put your shoulder to the wheel
Borrowell cannot improve your credit score for you; you must put in the time and effort.
You must hold yourself accountable.
However, they will be there to show you your progress and cheer you up when your score goes up or let you know if you hit a bump in the road.
Regularly checking your credit score will let you know if you are on the right track or not. Borrowell pulls your credit score report every week so you can quickly make the right decisions.
Credit Coach
You don’t have to go on your journey to financial well-being alone. Use the tools that are available to you to hold yourself accountable and to motivate you on rainy days.
Borrowell offers a Credit Coach to help you improve your credit. The Coach provides a free credit check, monitors your credit, analyzes your profile, and even sends you tips on what you can do to improve your credit score. For free.
Financial Product Recommendations
Before choosing a financial product, such as a credit card or a mortgage, make sure to check Borrowell’s recommendations for your specific needs.
You simply need to answer a few questions when you apply for the product. Borrowell will recommend the right types of credit products for your needs while ensuring you have the highest approval rate.
They offer products like credit cards, loans, bank accounts, mortgages, insurance, and even investing products.
You don’t have to compare hundreds of products to make your decision; Borrowell will regroup all of your options and detail them on a user-friendly page.
Parting thoughts
Even if you are going through difficult times with your finances, it’s never too late to start working on your credit score. Sign up at Borrowell for free to check your weekly credit score updates and take action to improve your credit score.
Great blog post, I’ve never heard of Barrowell before! Thanks for sharing 🙂
Credit score is so important, but a lot of younger people don’t get the information they need. Thanks for sharing this info and getting it out there!
You make such a great point about needing to hold yourself accountable. Finances can be such a tough thing to keep up with but it’s so incredibly important to find a system that works. I’d never heard of Borrowell before but I love that it has free bill tracking!
I agree with Alyssa that many younger people don’t understand the importance, nor are they equipped with the knowledge of how to manage their credit score. We get one free credit report per year in the US, and many never take advantage of it to review their history for red flags. My credit union recently rolled out a feature where I can check my credit score with the click of the button, which has been very cool for monitoring! I still need to go online once per year, though, to get the full report.
this is a good way to track credit scores, sharing this to my family and friends in Canada
Awesome article! A lot of people don’t realize how important your credit rating really is, until you apply for a mortage. I think we should all be more mindful when it comes to our finance and teach our children early on, on the consequences. Thanks for sharing.
I didn’t know they did credit scores in Canada! Good to know!
I hadn’t heard of this app previously. I use Credit Karma since I’m in the US. Great info!
It’s been years since I last checked my credit score and rating. Never heard of Borrowell, but will have to check it out. There are so many US based companies, so it’s nice to get a recommendation for a Canadian one! Thanks for sharing this out!
Exactly! I knew about so many American companies but we definitely needed one here. As I said in the post, I’ve been using Borrowell for over a year, and this is one of the factors that convinced me to become debt-free!
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