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Tag: credit score

  • Celebrate Your Financial New Year: A Q&A With Atlanta Community Manager, Laurie Winters

    As 2025 draws to a close, it’s a great time to reflect on the year and set yourself up for success in 2026. Whether you’re building new habits or refining your financial strategy, Laurie Winters, Chase Community Manager in Atlanta, shares practical tips to strengthen your financial health journey.

    Q:  What’s been a key financial health learning for you in 2025?
    A:     This year, I’ve been really inspired by the enthusiasm in Atlanta for financial education. People here aren’t afraid to dream big—buy a home, save for retirement, plan for college, or grow their business—and are really excited about the process to get there. One of the most rewarding parts of my job is helping connect them with the tools and knowledge to turn those dreams into reality.

    One trend that stands out is the increasing complexity of fraud and scams. These can have a serious impact on anyone’s financial wellbeing. That’s why I’ve made it a priority to host workshops focused on fraud prevention—covering the latest scams, warning signs, and practical steps to help safeguard your personal information. Staying informed and proactive is the best way to keep yourself and your loved ones safe.


    Q: As the year wraps up, what should the Atlanta community keep in mind about their finances?
    A:     The new year is a fresh start, and it’s the great time to build habits that set you up for success. Here are a few ways to get started:

    • Think of your budget as your personal roadmap—it shows you exactly where your money is going and helps you steer toward your goals. Take a little time each month to track your income and expenses. When you set a budget that truly reflects your priorities, you’re not just managing money—you’re empowering yourself to make confident decisions
    • Saving doesn’t have to be overwhelming. Even small, consistent deposits can grow into something meaningful over time. Try automating your savings so it happens without you even thinking about it—like paying yourself first. Watching your savings grow, no matter the amount, is a powerful way to build financial security and peace of mind.
    • Your credit score is more than just a number—it’s a key that can unlock new opportunities, from buying a home to starting a business. Strengthen your credit by paying bills on time and keeping your balances manageable.

    Q:  What are some tips for your neighbors to start the new year on the right financial foot?
    A: No matter where you are in your financial journey, I think everyone should do a year-end financial check-up. Review your budget and savings, set realistic goals, and make a plan you can stick to in the new year. Anyone can visit their local Chase branch and ask about getting access to a financial health check-up at no cost—available to all, no matter who you bank with. Our teams live, work, and are rooted here – and we are deeply committed to uplifting the communities and serving our neighbors every day.

    As Community Manager, I’m focused on financial education and community partnership to help strengthen financial health journeys. I host free workshops on essential topics like budgeting, saving, building credit, and preventing fraud and scams. These workshops are open to all, not just Chase customers, and can help you start the new year on the right foot. 

    Q: What financial health initiatives are you excited about in 2026?
    A:     I’m especially excited to help demystify credit for our community. Credit can feel intimidating, but it’s actually a powerful tool that can help you unlock new opportunities—whether that’s buying a home, starting a business, or simply getting better rates on everyday purchases. In my workshops, I break down the basics: why it’s important to know your credit score, how to check it, and simple steps you can take to improve it—like paying bills on time, keeping balances low, and avoiding unnecessary debt. We also talk about how your credit score can be a stepping stone to achieving your biggest goals. My advice? Don’t shy away from learning about credit. The more you understand, the more control you have over your financial future.

    Q: How can neighbors get involved and benefit from your community work?
    A:     Getting involved is easy—and it can make a real difference in your financial journey. We have Community Managers in every state and D.C., all dedicated to supporting their local neighborhoods. Our free workshops cover essential topics like budgeting, saving, building credit, and protecting yourself from fraud and scams. These sessions are open to everyone, not just Chase customers, and are designed to be practical and welcoming. Whether you’re looking for guidance, want to ask questions, or just want to connect with others who are working toward similar goals, we’re here for you. I encourage you to join us, bring a friend, and take advantage of the resources and support available right in your community.


    Q: If you could give one piece of financial advice to the community for 2026, what would it be?
    A: My top advice is to be proactive: take the time to review your finances, set clear and achievable goals, and create a plan to reach them. Don’t wait for a crisis or a big life event to get started—small steps today can lead to big results tomorrow. And remember, you don’t have to do it alone. Our team is here to help, whether you need a quick check-up, want to talk through your options, or need help building a plan. You don’t need to be a Chase customer to benefit from our expertise and support. We’re committed to helping our neighbors build a stronger, more resilient financial future—one step at a time.

    The bottom line

    The end of the year is the perfect time to reset your financial goals and take positive steps toward a stronger future. Stop by your local Chase branch for a free financial check-up, sign up for one of my free workshops, and let our team help you start 2026 with confidence.

    For informational/educational purposes only: Views and strategies described on this article or provided via links may not be appropriate for everyone and are not intended as specific advice/recommendation for any business. Information has been obtained from sources believed to be reliable, but JPMorgan Chase & Co. or its affiliates and/or subsidiaries do not warrant its completeness or accuracy. The material is not intended to provide legal, tax, or financial advice or to indicate the availability or suitability of any JPMorgan Chase Bank, N.A. product or service. You should carefully consider your needs and objectives before making any decisions and consult the appropriate professional(s). Outlooks and past performance are not guarantees of future results. JPMorgan Chase & Co. and its affiliates are not responsible for, and do not provide or endorse third party products, services, or other content.

    Deposit products provided JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender.

     © 2025 JPMorgan Chase & Co.

    Sponsored by JPMorganChase

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  • HELOC rates today, November 23, 2025: Lowest 2025 rates in time for holiday cash needs

    Nationally, the average home equity line of credit interest rate remains under 8%, according to the analytics company Curinos. With the holidays looming, a HELOC can be an excellent source of cash when you need it most.

    According to Curinos data, the average weekly HELOC rate is 7.64%, its lowest point so far in 2025. This rate is based on applicants with a minimum credit score of 780 and a maximum combined loan-to-value ratio (CLTV) of 70%.

    Homeowners have a huge amount of value tied up in their houses — nearly $36 trillion at the end of the quarter of 2025, according to the Federal Reserve. That’s the largest amount of home equity on record.

    With mortgage rates lingering above 6%, homeowners are not likely to let go of their primary mortgage anytime soon, so selling a house or getting a cash-out refinance may not be an option. Why give up your 5%, 4% — or even 3% mortgage?

    Accessing some of that value with a use-it-as-you-need-it HELOC can be an excellent alternative.

    HELOC interest rates are different from primary mortgage rates. Second mortgage rates are based on an index rate plus a margin. That index is often the prime rate, which has fallen recently to 7.00%. If a lender added 0.75% as a margin, the HELOC would have a rate of 7.75%.

    Lenders have flexibility with pricing on a second mortgage product, such as a HELOC or home equity loan, so it pays to shop around. Your rate will depend on your credit score, the amount of debt you carry, and the amount of your credit line compared to the value of your home.

    And average national HELOC rates can include “introductory” rates that may only last for six months or one year. After that, your interest rate will become adjustable, likely beginning at a substantially higher rate.

    You don’t have to give up your low-rate mortgage to access the equity in your home. Keep your primary mortgage and consider a second mortgage, such as a home equity line of credit.

    The best HELOC lenders offer low fees, a fixed-rate option, and generous credit lines. A HELOC allows you to easily use your home equity in any way and in any amount you choose, up to your credit line limit. Pull some out; pay it back. Repeat.

    Meanwhile, you’re paying down your low-interest-rate primary mortgage like the wealth-building machine you are.

    Today, LendingTree is offering a HELOC APR as low as 6.38% on a credit line of up to $150,000. However, remember that HELOCs typically come with variable interest rates, meaning your rate will fluctuate periodically. Make sure you can afford monthly payments if your rate rises.

    And as always, compare fees, repayment terms, and the minimum draw amount. The draw is the amount of money a lender requires you to initially take from your equity.

    The power of a HELOC is tapping only what you need and leaving some of your line of credit available for future needs. You don’t pay interest on what you don’t borrow.

    Rates vary so much from one lender to the next that it’s hard to pin down a magic number. You may see rates from just below 6% to as much as 18%. It really depends on your creditworthiness and how diligent a shopper you are.

    For homeowners with low primary mortgage rates and a chunk of equity in their house, it’s probably one of the best times to get a HELOC. You don’t give up that great mortgage rate, and you can use the cash drawn from your equity for things like home improvements, repairs, and upgrades. Of course, you can use a HELOC for fun things too, like a vacation — if you have the discipline to pay it off promptly. A vacation is likely not worth taking on long-term debt.

    If you withdraw the full $50,000 from a line of credit on your home and pay a 7.50% interest rate, your monthly payment during the 10-year draw period would be about $313. That sounds good, but remember that the rate is usually variable, so it changes periodically, and your payments will increase during the 20-year repayment period. A HELOC essentially becomes a 30-year loan. HELOCs are best if you borrow and repay the balance within a much shorter period.

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  • Turn Over a New Financial Leaf this Fall: Strategies for Credit Score Success

    As the days grow shorter and autumn settles in, it’s a good time to shine a light on a topic that can feel mysterious: your credit score. For many, credit can feel confusing or even intimidating, but understanding how it works and why it matters can be an important step toward strengthening your financial health journey.

    How Your Credit Score Impacts Your Financial Journey

    Your credit score is a three-digit number used by lenders, landlords, insurance companies, mobile phone providers, and financial institutions to assess your reliability. A higher score can help you qualify for lower interest rates and better loan terms, saving you money in interest and making it easier to achieve major financial goals such as buying a home or car.

    Establishing good credit means building a record of responsible usage. Using your credit card and paying your bill on time demonstrates financial responsibility to lenders. On the other hand, missing payment deadlines or not meeting the minimum amount due can negatively impact your score.

    Understanding the Factors Behind Your Credit Score

    Credit scores typically range from 300 to 850. The better your score, the more options you may have with lenders. Here’s what usually influences your score:

    • Payment History: Consistently paying bills on time has a positive impact, while late or missed payments can lower your score.
    • Credit Utilization: Using a smaller portion of your total available credit is better for your score; high balances relative to your total credit limits can be a negative factor.
    • Total Debt: Lower overall debt is viewed more favorably, while carrying high debt can reduce your score.
    • Types of Credit Accounts: Having a mix of credit accounts, such as credit cards, auto loans, and mortgages, can strengthen your score.
    • Length of Credit History: A longer track record of responsible credit use contributes positively to your score.
    • Recent Credit Applications: Applying for new credit  can temporarily lower your score.
    • Credit Inquiries. Soft inquiries, like checking your own credit or receiving pre-approved offers, don’t affect your score. Hard inquiries, such as applying for a loan or credit card, may lower your score slightly, but the impact fades over time and drops off your report after two years.

    If your credit score is on the lower end, don’t worry—there are steps you can take to help improve it.

    Credit Smart Habits 

    • Pay your bills on time. Payment history is an important factor when it comes to calculating your credit score. If you struggle with meeting payment deadlines, consider setting reminders or enrolling in autopay.
    • Pay down your debt. Your credit utilization—meaning the size of your card balance—is the second biggest factor in most credit scoring models. Create a plan to pay down high-interest debt first.
    • Monitor your credit with Chase Credit Journey®. Regularly checking your credit report can help you spot areas of improvement and fix errors. Chase Credit Journey is a free tool that lets you monitor your score without impacting it, and provides alerts if your personal information is exposed in a data breach. It’s free for everyone, no Chase account required.

    Turning Credit Concerns into Financial Wins

    Building credit doesn’t have to be spooky and mysterious. With patience and smart financial habits, you can improve your score and unlock financial opportunities. This fall, take steps to understand and strengthen your credit.

    Sponsored by JPMorganChase

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  • Gen Z credit scores are having a ‘catastrophic drop’—student loans and doomspending may be to blame | Fortune

    As Gen Z awaits its share of the $124 trillion Great Wealth Transfer from their baby boomer relatives, the generation’s financial footing is being put to the test.

    Typically, younger consumers see the fastest year-over-year gains in credit scores as they build their financial histories. But this year, the opposite happened: Gen Z just experienced the steepest annual drop of any age group since 2020, with their average FICO credit score slipping three points to 676. That’s 39 points lower than the national average of 715, according to a new FICO report.

    The decline is a “red flag,” said Erin Stillwell, head of payments at Globant—not only for young consumers, but for the health of the broader credit market.

    “Today’s young adults borrow just to reach baseline stability, not luxury,” she told Fortune. “The decline reflects a generation building financial identity in a system that rewards stability but gives volatility.”

    And that volatility is piling up. Gen Z is more likely to feel the sting of stubborn inflation and high interest rates. With less time to build savings, invest in the stock market, or benefit from home appreciation, they’re already on shakier financial ground than their older counterparts. Add in the return of student loan payments and the rise of “doomspending”—the impulse to spend as a way with financial anxiety—and it’s become a perfect storm.

    “Compared to past generations, Gen Z’s financial fragility isn’t just cyclical—it’s structural,” added Stillwell. “Gen Z is the first cohort facing high inflation, digital credit, and social-media-driven consumption pressure simultaneously.”

    The long-term financial ‘snowball’ that could trap Gen Z

    While it’s not uncommon for credit scores to ebb and flow—especially amid major shifts like the return of student loan payments—the current downturn could have lasting consequences if spending and repayment habits don’t change.

    “I really was so disheartened when the information came out that Gen Z, the generation that is coming up, [that is supposed] to essentially help our country move in the way that it’s supposed to move… saw this catastrophic drop,” credit expert Micah Smith told Fox Business. “Once the credit scores drop, it’s like this snowball effect. Because what it does is, it impacts everything you do moving forward.”

    A lower credit score can make it harder to qualify for credit cards or loans, push up borrowing costs, or even affect car insurance or apartment applications. Over time, that can trap young adults in a cycle of debt and missed opportunities to grow their financial futures—from starting a business to buying a home.

    Homeownership in particular, long considered a cornerstone of the American Dream, is already slipping further out of reach. Gen Zers now carry more than $94,000 in personal debt on average, a Newsweek poll showed—far more than millennials’ roughly $60,000 or Gen X’s $53,000. With rent prices still high across much of the country, saving for a down payment can feel nearly impossible.

    “It’s not just an individual issue—it’s a societal one,” Stillwell said. “A generation unable to build financial stability translates into lower economic dynamism and weaker household formation.”

    Still, she said there’s room for optimism—especially if Gen Z treats their financial health just how they treat their body’s wellbeing: “Forgive yourself for early mistakes, but learn from them fast.” 

    “Financial resilience isn’t perfection; it’s iteration,” Stillwell said.

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    Preston Fore

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  • How your rent payments can help build your credit history – MoneySense

    Rent reporting can help boosts credit scores

    “Your rent is your biggest monthly obligation for debt payments so it’s unfair that it’s not counted towards building your credit,” said Viler Lika, founder and CEO of rental services company SingleKey. 

    Companies like SingleKey, Zenbase, Borrowell, and FrontLobby offer such rent-reporting services, with varying fees and requirements. SingleKey works with landlords and property managers across Canada and screens more than 15,000 rental applications every month. Landlords pay a $30 fee for a tenant screening report, and renters pay $8 per month to report their rent payments on the SingleKey platform.

    “This is a very powerful tool for graduating towards home ownership as a renter because you’re demonstrating to the lender that you have the ability to pay a large amount,” Lika said. 

    The platform accommodates pauses in rent reporting too—when you might move back in with your parents, for example—without harming your credit. 

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    Rent reporting isn’t risk-free

    Lika believes rent reporting will make housing more accessible for renters while also reducing tenant delinquency risk for landlords. However, Alex Leduc, CEO and principal broker of Toronto-based mortgage brokerage firm Perch, cautions that such disclosure can come with its own set of concerns. “If [you] stop reporting, it would be a red flag to lenders and they would dig deeper,” he said. “And if [you] keep reporting and arrears show on [your] credit report, then [your] credit score would likely go down as a result.”

    Leduc advises against opting into a rent-reporting program if you anticipate missing a payment or even paying a few days late. “Otherwise, you’re just shining a light on a poor repayment history that would’ve potentially gone unnoticed,” he said.

    However, Leduc believes rent reporting can be beneficial especially for longtime renters, new immigrants, or aspiring homebuyers with little or no credit history. “Not having a credit score is a massive impediment to getting credit at all,” Leduc said. “When you’re trying to get a mortgage, you’re ultimately asking a lender to give you hundreds of thousands of dollars … They want to know you’ve managed credit successfully before.”

    He said there are three key components to preparing a mortgage application: credit score, down payment, and income. And while a down payment can often be resolved—by receiving gifted funds from family, for example—having poor credit can be a “deal breaker.”

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    Understanding credit ratings and scores

    Money Mentors CEO Stacy Yanchuk Oleksy said credit ratings and credit scores are often misunderstood.

    A credit rating is given for each of your credit products. It’s based on a scale of one to nine, with one being the best (meaning you’re at least making minimum payments on your credit card, for example). As you miss payments, you go up the scale. A credit rating of nine would indicate a debt in collection or even bankruptcy.

    All of this information contributes to your credit score—a three-digit number from 300 to 900 that’s used as a predictor of how likely you are to pay back your debts. The higher the score, the more “credit worthy” you are.

    Oleksy ,who is also a certified credit counsellor, said there are often misconceptions about what builds and harms your credit score. Being granted a high credit limit on your credit card, for example—even if you pay it off in full every month—can actually be disadvantageous, she said. “When your credit score is calculated, it looks at all that available credit and says that’s debt because [theoretically] you could go out to town tomorrow [and spend it].”

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    About The Canadian Press


    About The Canadian Press

    The Canadian Press is Canada’s trusted news source and leader in providing real-time stories. We give Canadians an authentic, unbiased source, driven by truth, accuracy and timeliness.

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  • Pinching pennies in South Carolina? Most residents are. Here’s were WalletHub ranks it

    People who live in red states are in more financial distress than those living in blue states, according to a recent WalletHub study.

    Texas ranked at No. 1 on the study’s Top 10 financially distressed states, with Texan residents having the ninth-lowest average credit score in the country in Q1 in 2025. The state also had the third-highest number of accounts in forbearance or with deferred payments per person, as well as the seventh-highest share of people with these distressed accounts at 7.1%.

    Florida (No. 2) and Louisiana (No. 3) followed closely behind Texas, with South Carolina’s placement on the list not too far off.

    “Measuring the share of residents in financial distress is a good way to take the pulse of a state and see whether people are generally thriving or having trouble making ends meet,” said Chip Lupo, WalletHub analyst. “When you combine data about people delaying payments with other metrics like bankruptcy filings and credit score changes, it paints a good picture of the overall economic trends of a state.”

    WalletHub defines a financially distressed account as one that is in forbearance or has its payments deferred.

    To determine the most financially distressed states, WalletHub compared 50 states across nine key metrics in six categories, including credit score, people with accounts in distress, average number of accounts in distress, change in number of bankruptcy filings (March 2025 vs. 2024), “debt” Search Interest Index, and “loans” Search Interest Index. The study then determined the weighted average across all metrics to calculate an overall score for each state, using the resulting scores to rank-order the states.

    Data used to create the study’s rankings were collected as of June 17, 2025, from the Administrative Office of the U.S. Courts, TransUnion, Google Trends and WalletHub database.

    South Carolina ranked No. 5 when it comes to the most financially distressed states in the country, with an overall score of 56.49. This score is comprised of the following data:

    • Credit score rank: 30

    • People with accounts in distress rank: 2

    • Average number of accounts in distress rank: 4

    • Change in bankruptcy filings March 2025 vs. March 2024 rank 34

    • “Debt” Search Interest Index rank: 22

    • “Loans” Search Interest Index rank: 5

    In WalletHub’s study, blue states scored an overall average rank of 32.95, while red states scored 20.94. The majority of financially distressed states in the study’s Top 10 are red states:

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  • How bad access to credit keeps newcomers from getting ahead – MoneySense

    According to a 2025 TD survey, 92% of newcomers understood the importance of building credit before arriving in Canada. Yet 82% of those who applied for credit faced immediate barriers. For many, these challenges go beyond inconvenience. They directly affect immigrants’ ability to secure housing, buy a car, start a business, and simply build a life in Canada.

    This isn’t just about money. It’s about inclusion. And if Canada sees immigration as important to its future, then removing systemic financial barriers must be part of the national conversation.

    A cultural shift, and a credit wake-up call

    Like many immigrants, I arrived in Canada financially stable. But the Canadian financial system didn’t recognize that.

    I grew up in India and the Middle East with a simple rule: never buy what you can’t afford. Credit cards weren’t necessary, loans weren’t encouraged, and financial independence meant living within your means. That worldview shaped my early adult life—until I met my wife, who was born and raised in Ottawa.

    I remember one of our early conversations while we were still living abroad. She was confused about why I booked flights through a travel agent. The answer was simple: I didn’t have a credit card. And I didn’t feel like I needed one. To her, this was strange; in Canada, a credit card is a default tool for everything from booking travel to building rewards points. For me, it felt like a way to buy things I couldn’t afford. We weren’t arguing, just coming at the problem from different cultural angles.

    Eventually, I applied for a credit card and, like many people who didn’t grow up using credit, I abused it at first. It felt like free money, but that illusion wore off quickly. Over time, I developed a healthy relationship with credit: using it for convenience, managing payments responsibly, and collecting points for purchases I would have made anyway. When we eventually moved to Canada, all of that learning felt like it didn’t matter anymore.

    Earning, saving and spending in Canada: A guide for new immigrants

    Credit history doesn’t travel

    Here’s a truth most newcomers know, but few are prepared for: your financial history doesn’t follow you.

    Despite arriving with a strong financial foundation, I couldn’t qualify for a meaningful credit limit. My first Canadian credit card had a limit of $200, barely enough for half a Costco run. It wasn’t that I had a bad credit score. I didn’t have one at all. And building one from scratch took years.

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    This wasn’t just a minor inconvenience. It affected every part of our lives.

    We couldn’t get a mortgage, not because of our income or how much we had saved for a down payment, but because of a lack of credit history. When we finally did qualify, we had been in the country for years and had done everything right: on-time payments, healthy credit utilization, excellent scores in the 800s. But still, I wasn’t seen the same way the system viewed my wife, who had been born and raised here.

    Even now, after more than six years in Canada, my access to credit remains restricted. I don’t get offers for balance transfers, lines of credit, or automatic credit increases like she does. Why? Because she has decades of history, and I don’t. The system rewards longevity, not responsibility.

    Harder than it should be

    The TD survey confirms what I experienced. Among newcomers:

    • 31% qualified only for credit limits too low to meet basic needs
    • 27% struggled to secure housing
    • 24% couldn’t save or invest for future goals
    • 66% worried about their Canadian credit history
    • 79% found it difficult to start building credit at all

    That last stat is crucial. Building credit isn’t just hard, it’s systemically difficult for immigrants. And that’s the problem.

    Even though 92% of newcomers say building credit is important, they’re often left without the tools to do it effectively.

    Yes, the financial services industry is beginning to acknowledge the unique needs of newcomers, but acknowledgment isn’t enough. It’s like going to a doctor who finally understands your symptoms but doesn’t have a treatment. Empathy without action is still inaction.

    If Canada wants newcomers to succeed, we need more than empathy. We need solutions.

    Vickram Agarwal

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  • New to Canada? A new way to transfer your credit score – MoneySense

    New to Canada? A new way to transfer your credit score – MoneySense

    The credit reporting company said Thursday that the Global Consumer Credit File will make it easier for immigrants to access services like loans and cellphone plans in Canada by providing the additional data.

    “It’s really important when newcomers land that they get access to the financial services ecosystem, and without credit history that’s very difficult to do,” said Sue Hutchison, head of Equifax Canada.

    “They’re typically looking to, you know, rent an apartment, get a mobile phone, probably a credit card, and all of those things require credit history. So not having it makes it very difficult for newcomers.”

    Earning, saving and spending in Canada: A guide for new immigrants

    What is Nova Credit? What does it offer?

    Equifax isn’t the first to launch such a program in Canada. San Francisco-based Nova Credit, which launched in 2016 to provide global credit score access, expanded into Canada last year in a partnership with Scotiabank.

    The company has since expanded with partnerships at RBC, BMO and Rogers Communications Inc., among others.

    Nova Credit partners with several credit bureaus, including Equifax, to provide data from more than 20 countries. With Equifax becoming a competitor in the space, Hutchison said conversations are underway around data access going forward.

    Foreign credit score sourcing with Equifax

    Equifax, which has operations or investment in 24 countries, will have the advantage of being the direct provider of data from its foreign bureaus, said Hutchison.

    “It’s going be coming directly from us. So that’s, I think, very attractive to the lenders themselves that they’ll be dealing directly with the credit bureau.”

    The Canadian Press

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  • How to fix bad credit history in Canada: 3 steps to boost your score – MoneySense

    How to fix bad credit history in Canada: 3 steps to boost your score – MoneySense

    1. Review your credit report for errors

    It’s important to review your credit report and score at least once a year, especially when you’re trying to improve it. You can obtain your credit report and score through Canada’s two credit bureaus, a third-party service or your bank’s website or mobile app, as noted above. Doing so will not affect your score.

    Look over the report to see what’s documented and ensure the information is correct. You can remove incorrect information at no charge by filing a dispute directly with the credit bureaus. Errors in your report or instances of identity theft can cause your score to be lower than it should be and addressing these errors could increase it dramatically. Look for things like:

    • Errors related to personal details such as phone number, reported addresses, birth date and full name
    • Incorrect accounts due to identity theft
    • Balances on accounts that have been paid off
    • Unauthorized purchases due to fraud

    It can take time for errors to completely disappear from your credit report, so the sooner you address the issue, the sooner you can start the process of rebuilding your credit.

    Even if there are no mistakes, the report provides an overview of your accounts, offering insights into how to enhance your credit and better manage debt.

    2. Focus on paying down debt

    A history of consistently paying down debts is a good starting point for improving your credit, and it’s something you can immediately take action on. Even if you only have one big bill, it’s important to prioritize paying it down. Paying at least the required miniumum amount, on-time, every time, is crucial for your credit score. And remember that carrying debt is expensive, so you’ll want to try to pay off these debts in full as soon as possible by putting more money towards the outstanding balances.

    You can do this by creating a debt repayment plan using either the avalanche or the snowball repayment methods. Avalanche focuses on paying off the debt with the highest interest rate first. By prioritizing high-interest debt, you save money in the long run and can pay off your debts more efficiently. The Snowball method has you pay off the smallest debt first, which can provide quick wins and keep you motivated with each debt that gets knocked out. Each method has its pros and cons, so pick the one that best fits your financial situation.

    3. Watch out for credit repair scams

    Some companies claim they can fix your credit and solve your debt problems quickly—and you may be tempted to use their services if you have a less-than-perfect credit score. However, you can only rebuild credit—there’s no quick fix. 

    Credit repair companies may say they will fix your credit by removing negative information from your credit report to boost your credit score—for a costly, up-front fee. These companies often take advantage of the fact that many Canadians don’t know you accurate information cannot be removed from a credit report—even if it’s bad. Be cautious of companies offering credit repair services. It’s likely a scam if a company: 

    Randolph Taylor

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  • How to build credit history in Canada – MoneySense

    How to build credit history in Canada – MoneySense

    How to get a credit card in Canada

    Well, you apply. But make sure you’re applying for the right card and that you have a high chance of being approved. You see, the credit card company will check your credit history, and that can affect your current credit score. So, don’t apply for a bunch and hope for the best, as that could make it look like you are at risk for having access to too much credit. The good news: There are many types of credit cards in Canada, including those for newcomers to Canada, students and even those with bad or no credit. Check out our rankings for the best credit cards in Canada for your situation.

    Once you have a credit card you will want to maintain good credit habits, like paying it off on time and paying more than the required minimum payment. Here are some other articles that will help you navigating your first credit card in Canada.

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    Why is credit history important?

    Say you want to rent an apartment. Your credit history is vital because most landlords will want to see your credit score and credit report to judge whether you’ll pay your rent on time. If you get the apartment, you’ll want an internet connection—and for this, too, the large providers will query your credit score.

    If you need to buy or lease a car, your credit history will not only determine whether you’re approved for a loan, but also what interest rate you’re offered: the higher your credit score, the lower the interest rate. Insurance companies may check your credit history before providing coverage. And finally, if you want to buy a home, your credit history is key to qualifying for a mortgage, as well as what mortgage interest rates lenders will offer. A lower rate could save you tens of thousands of dollars over the life of your mortgage.

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    How to build a good credit history when you have no credit history

    Credit history is usually built organically as people start using credit. In Canada, young people who have reached the age of majority (18 or 19, depending on where they live) can apply for a credit card and start building a history of borrowing and repayment.

    If you’re a newcomer to Canada, or if you’re a student, recent grad or young adult who doesn’t have much of a credit history, your credit score may be low—which is a hurdle in getting approved for credit. It’s a frustrating cycle—you need credit history to access credit, and you need credit to build that history. So, what’s the solution? Here are a few steps anybody can take to build their credit history:

    Aditya Nain

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  • “I’m interested in visiting Europe”: How this student can build a credit score while earning valuable travel rewards – MoneySense

    “I’m interested in visiting Europe”: How this student can build a credit score while earning valuable travel rewards – MoneySense

    Before heading to school, Kinsey acquired her first credit card, an Alterna Savings Cash Back Visa. Although she also banks with EQ Bank, her primary bank card was with Alterna Savings and Credit Union. “So it was kind of natural and the easiest way for me to get a credit card,” she explains.

    Still new to credit cards, Kinsey doesn’t have a credit score—a number between 300 and 900 that shows lenders how creditworthy you are (the higher the score, the better). She’s looking to build one while also earning rewards—be it cash back (to “make the most of my spending”) or travel points (she’s an Aeroplan member). 

    Kinsey is an avid traveller—she recently visited Greece and Japan, where she has family. “I’ve been down south to Cuba and Florida. I went to Halifax, because I have some friends out there. I’ll travel within Canada, but I’m definitely more interested in visiting places in Europe,” she says. 

    Photo courtesy of Aya Kinsey

    What credit card features does she need? 

    Like many university students, Kinsey’s ambitious, eager to travel and just wants to find her financial footing. Given her existing ties to Alterna, it’s no surprise she ended up with an Alterna Savings Cash Back Visa—most Canadians stick with the same financial institutions for a good part of their lives. But, Kinsey can find a credit card better suited to her needs by expanding her horizons. 

    With Alterna, she gets 1 Collabria reward point per $1 spent on groceries, gas, public transit, select recurring bills and digital streaming purchases, and 0.5 points on all other purchases. The value of those points maybe an issue. The value of a Collabria point fluctuates based on what you’re redeeming for: cash back offers the best value, at $0.01 per point, but you must redeem in increments of 3,000 points (for $30), 5,000 points ($50) and 10,000 points (for $100), depending on the Collabria card you have. And when redeeming for travel, merchandise or gift cards, a point can be worth anywhere from $0.002 and $0.008. This means cardholders earn a maximum return of 1% in rewards ($0.01) for every dollar they spend. Often, the return is less than that. 

    For Kinsdey, it’s clear travelling is a priority. She needs a credit card that can cheapen the costs of flying to visit family and friends. At the same time, she’s just getting familiar with paying for life on her own, tuition being her biggest expense, and her income this year will be modest at best—she hopes to freelance as a content marketer. 

    So, right now, Kinsey’s primary goals should be building a credit score and increasing her income potential by completing her studies. Later in life, she will likely have access to plenty of premium travel credit cards to match her desired lifestyle—for example, she’ll need a personal annual income of $60,000 for Visa Infinite cards and $80,000 for World Elite Mastercards. 

    Which credit card should she get?

    Credit card pick #1: CIBC Aeroplan Visa Card for Students

    For her current situation, the CIBC Aeroplan Visa Card for Students would tick a lot of boxes. It’s a no-fee, no-income-required card. Kinsey’s already an Aeroplan points collector, and the CIBC Aeroplan Visa would add 1 Aeroplan point to her account per $1 spent on Air Canada purchases (such as future flights) and on groceries—she has a campus meal plan but expects it won’t cover all her food expenses. That’s in addition to points already earned as an Aeroplan member, through the “earn points twice” feature of Aeroplan credit cards. 

    Justin Dallaire

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  • “I’m interested in visiting Europe”: How this student can build a credit score while earning valuable travel rewards – MoneySense

    “I’m interested in visiting Europe”: How this student can build a credit score while earning valuable travel rewards – MoneySense

    Before heading to school, Kinsey acquired her first credit card, an Alterna Savings Cash Back Visa. Although she also banks with EQ Bank, her primary bank card was with Alterna Savings and Credit Union. “So it was kind of natural and the easiest way for me to get a credit card,” she explains.

    Still new to credit cards, Kinsey doesn’t have a credit score—a number between 300 and 900 that shows lenders how creditworthy you are (the higher the score, the better). She’s looking to build one while also earning rewards—be it cash back (“to make the most of my spending”) or travel points (she’s an Aeroplan member). 

    Kinsey is an avid traveller—she recently visited Greece and Japan, where she has family. “I’ve been down south to Cuba and Florida. I went to Halifax, because I have some friends out there. I’ll travel within Canada, but I’m definitely more interested in visiting places in Europe,” she says. 

    Photo courtesy of Aya Kinsey

    What credit card features does she need? 

    Like many university students, Kinsey’s ambitious, eager to travel and just wants to find her financial footing. Given her existing ties to Alterna, it’s no surprise she ended up with an Alterna Savings Cash Back Visa—most Canadians stick with the same financial institutions for a good part of their lives. But, Kinsey can find a credit card better suited to her needs by expanding her horizons. 

    Her Alterna card is associated with Collabria rewards, a loyalty program that works with some Canadian credit unions. She gets 1 Collabria reward point per $1 spent on groceries, gas, public transit, select recurring bills and digital streaming purchases, and 0.5 points on all other purchases. The value of a Collabria point fluctuates based on what you’re redeeming for: cash back offers the best value, at $0.01 per point, but you must redeem in increments of 3,000 points (for $30), 5,000 points ($50) and 10,000 points (for $100), depending on the Collabria card you have. And when redeeming for travel, merchandise or gift cards, a point can be worth anywhere from $0.002 and $0.008. This means cardholders earn a maximum return of 1% in rewards ($0.01) for every dollar they spend. Often, the return is less than that. 

    For Kinsdey, it’s clear travelling is a priority. She needs a credit card that can cheapen the costs of flying to visit family and friends. At the same time, she’s just getting familiar with paying for life on her own, tuition being her biggest expense, and her income this year will be modest at best—she hopes to freelance as a content marketer. 

    So, right now, Kinsey’s primary goals should be building a credit score and increasing her income potential by completing her studies. Later in life, she will likely have access to plenty of premium travel credit cards to match her desired lifestyle—for example, she’ll need a personal annual income of $60,000 for Visa Infinite cards and $80,000 for World Elite Mastercards. 

    Which credit card should she get?

    Credit card pick #1: CIBC Aeroplan Visa Card for Students

    For her current situation, the CIBC Aeroplan Visa Card for Students would tick a lot of boxes. It’s a no-fee, no-income-required card. Kinsey’s already an Aeroplan points collector, and the CIBC Aeroplan Visa would add 1 Aeroplan point to her account per $1 spent on Air Canada purchases (such as future flights) and on groceries—she has a campus meal plan but expects it won’t cover all her food expenses. That’s in addition to points already earned as an Aeroplan member, through the “earn points twice” feature of Aeroplan credit cards. 

    Justin Dallaire

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  • Why parents may want to start locking a child’s credit at a very young age

    Why parents may want to start locking a child’s credit at a very young age

    Most parents would take herculean steps to protect their children. But many overlook a relatively simple way to help shore up a child’s financial security: freezing the minor’s credit. 

    This could be especially important in the wake of a major breach in which the Social Security numbers of myriad Americans might be for sale on the dark web. While locking their credit won’t solve all cybersecurity issues related to stolen Social Security numbers, it’s one extra layer of protection parents can implement.

    The credit-locking process involves contacting each of the three major credit bureaus — Experian, Equifax and TransUnion — and providing required documentation including the child’s birth certificate, Social Security card, proof of address and parent identification. The bureau then creates a credit report for the child and then locks it, so loans or credit cards can’t be issued using the child’s personal information. The freeze remains in place until the parent, or in some cases, the child, requests that it be lifted, temporarily or permanently.

    Parents can take these steps proactively even if there’s nothing to suggest a minor’s credit has been compromised such as unexpected credit card solicitations or bills received in the minor’s name.

    It can take some time and effort to lock a child’s credit, but the outlay is minimal compared with what can be a lengthy and emotional credit restoration process. “As an adult, if our credit is stolen, it makes us angry, but we do what needs to be done and we move forward,” said Kim Cole, community engagement manager at Navicore Solutions, nonprofit credit and housing counseling agency. But for children, the emotional impact is much greater, she said. “It can take years to get wind of a problem, and meanwhile the damage can continue to grow.”

    Identity theft against children — especially very young ones — often slips under the radar until they are older teens or young adults applying for their first credit card, trying to finance a car or seeking student loans, said Loretta Roney, president and chief executive of InCharge Debt Solutions, a nonprofit provider of credit counseling and other services.

    Yet, identity theft for children under age 19 is a growing issue, with this demographic accounting for 3% of all identity theft reports for the first half of 2024, according to Federal Trade Commission data. By comparison, this demographic accounted for 2% of identity fraud reports each year between 2021 and 2023. 

    Thieves might use a child’s Social Security number, name and address, or date of birth to do things like apply for government benefits, like health care coverage or nutrition assistance, open a bank or credit card account, apply for a loan, sign up for a utility service or rent a place to live, according to the FTC. Locking a child’s credit won’t protect against all of these, but it’s a solid step in the right direction, financial professionals said.

    It’s not just strangers committing fraud against children. Cole offers the example of a friend whose uncle had destroyed his credit and started using his niece’s name and Social Security number to open credit cards and max them out. He had the bills sent to his house, and the young woman only discovered the fraud about four years later, when she went to buy a small fixer-upper and realized she had nearly $50,000 of debt in her name and a credit score in the low 500s.  

    The niece filed a police report, a complaint with the FTC and disputed the items with the credit bureaus, but it took time to resolve. She applied for a secured credit card in the interim, since her score was too low to qualify for a traditional card, and the situation pushed back her home-buying by a few years, ultimately costing her more, Cole said.

    Check to see if the child has a credit report 

    Before locking a child’s credit, it’s good practice to check with each of the three major credit bureaus to see if a report exists. Generally, this will only be the case if someone has fraudulently taken out credit in the minor’s name, or if the child has been named an authorized user on an adult’s credit card. 

    To check to see if their child has a credit report, parents can mail a letter with their request to each of the credit bureaus. They should be sure to include a copy of the child’s birth certificate, Social Security card or document from the Social Security Administration showing this number and a copy of the parent’s driver’s license or government-issued identification, with current address. Legal guardians may have to give the credit bureaus a copy of documents authenticating their status.

    If something amiss pops up on the report, contact the companies where the fraud occurred as well as the three major credit bureaus. Also report the child identity theft to the FTC, including as many details as possible.

    If the report comes back clean, the next step is to actually lock the child’s credit.

    If needed, freeze a child’s credit

    The process for initiating a credit freeze varies slightly depending on the credit bureau and the age of the minor child. Be sure to follow the precise instructions for each credit bureau. For Equifax, in addition to required documentation, parents need to fill out a form online and submit it via postal mail; minors who are 16 or 17 may request their own security freeze by phone or by mail. The websites for Experian and TransUnion provide further details on their respective processes, which includes document requirements and mailing addresses. It can take a few weeks for the bureaus to process these requests. 

    Keep good records for unlocking later in life

    Parents need to keep safe the pin number they are provided when locking their child’s credit so it can be temporarily unlocked as needed, such as when the child turns 18 and wants to apply for a credit card, said Bruce McClary, senior vice president of membership and media relations at the nonprofit ​​​​​​​National Foundation for Credit Counseling.

    The unlocking process isn’t necessarily seamless and can take time. Equifax, for instance, asks for these requests in writing, with required documentation for identity verification purposes. After age 18, Equifax allows for managing the security freeze online.

    Educate children early on protection of personal information

    Parents should talk to their children about best practices with respect to sharing personal information, McClary said. For instance, they should caution children to be careful about the kinds of information they provide to websites and apps and to keep their Social Security number close to the vest.

    Parents may also want to consider credit or identity threat monitoring services or both. Certain providers may offer basic services for free, but family plans that include adults and children and offer a combination of credit and identity theft protection tend to be fee-based. These services — which can run around $24 or more per month — may offer more comprehensive protection, including identity theft insurance and fraud resolution services. Parents should weigh the options carefully to understand the choices and associated costs.

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  • What happens if you don’t use your credit card? – MoneySense

    What happens if you don’t use your credit card? – MoneySense

    If you find that you no longer need the credit, review any potential closure fees before deciding to cancel the card, too. Instead, you could look into downgrading the card, transferring balances, or using the card at least once a year for a small purchase to keep the account active.

    The impact of dormant cards on your credit rating

    Letting a credit card go dormant can impact your credit score in a few ways. As noted above as a con, if you don’t use a card for a long time, your credit issuer might close the account, which reduces your total available credit limit. For example, if your total credit limit drops from $10,000 to $8,000 with the account closure but your spending remains at $2,000, your utilization ratio rises from 20% to 25%. A higher ratio can negatively affect your credit score because it suggests you’re using more of your available credit.

    Having a mix of different credit types—such as credit cards, student loans, mortgages and car loans—helps maintain a healthy credit score. If a card is closed, you lose some of this diversity, which can also impact your score.

    Consistent on-time payments are crucial for maintaining good credit. Even if a card is dormant, missing payments can damage your score. To avoid this, pay more than the minimum payments on your credit cards and make all payments on time, every time. 

    It is important to review your credit report and score at least once a year to make sure there are no errors. You can obtain your credit report and score through Canada’s two credit bureaus, Equifax and TransUnion, a third-party service, or your bank’s website or mobile app. Even without any errors, regularly checking your report can help you better understand how your financial habits can affect your score and helps you see ways to improve it and manage debt better.

    Should you ever stop using your credit card?

    If you’re worried about letting your credit card go dormant, there are a few alternatives. Consider transferring balances from other credit cards or look at downgrading and switching to a no-fee version of the same card. Both of these options keep your account open and your credit utilization ratio low.

    You can also keep the card active by using it occasionally for small purchases, setting up a small recurring charge on it, or making it your go-to card for a regular expense, like buying gas. This helps keep your account in good standing without much hassle.

    How many credit cards is too many?

    There isn’t a set rule for how many credit cards Canadians should have in their wallets. The number of credit cards that is right for you depends on what you can afford to spend and pay back on time. Remember, it’s not just about the number of cards you have, but how responsibly you use them. 

    Sandy Daykin

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  • What is a Credit Reference on a Rental Application?

    What is a Credit Reference on a Rental Application?

    When you submit your rental application, you want to make sure you stand out as a quality tenant. One of the ways you can showcase the positive aspects of your application is by adding a credit reference. Not only can a credit reference attest to your creditworthiness as a renter, but it can also give a potential landlord additional information about you. 

    In this Redfin article, we’ll explain what a credit reference is and what to include in it when submitting your rental application. Whether you’re renting a home in Dallas or an apartment in Orlando, find out how you can make your application the best it can be.

    What is a credit reference?

    A credit reference is a document that attests to the creditworthiness of an applicant. The letters can come from a variety of sources, but their goal is the same — to provide detailed information proving you make on-time payments when bills are due.

    When applying for a rental, the landlord or property management company may already have reference requirements in place. If they don’t, you can consider offering these supplementary materials. Just make sure to choose credit references who will speak positively about your credit history.

    If you don’t have a strong credit history or you have outstanding debt, credit references can double as character references or employment references. Both can help show you’re a responsible tenant.

    When do you need credit references?

    Since credit references can expand on your payment history, and demonstrate your likelihood of making timely payments, there are a few scenarios you may want to use them. This can include applying for a loan or opening a new credit card. Of course, they can also be a key piece in the rental application process.

    These references not only shed light on an applicant’s credit history but also help landlords get an idea of your creditworthiness and whether you’re likely to pay rent on time.

    Can they replace credit reports?

    Credit scores are the most concise way for landlords to get an idea of your payment history and whether you’re missing payments, like from previous leases or other debts. However, credit scores don’t have additional details, just facts.

    Credit reports come from the three main credit bureaus, TransUnion, Equifax, and Experian. There’s no character reference attached to your credit score, and credit reports often leave out information about extenuating circumstances that led to you making a late payment.

    As a result, credit references can help fill in the blanks. They provide the specifics that can help a landlord understand what happened. For example, if you have a ding on your credit report for not paying a month’s rent on time, but your check got lost in the mail, a letter from your previous landlord could clear that all up.

    Most landlords will still want to see a credit report, so think of your credit references as a supplement rather than a replacement.

    Two people talking about condos

    How to choose credit references

    When choosing credit references, it’s important to ask people who will speak positively about your credit history. Choices might include:

    • A previous landlord
    • Utility companies
    • An employer
    • Financial institutions or any previous lenders

    Poor references might include:

    • A family member or friend
    • A former boss you haven’t spoken to in years
    • An ex-spouse

    A previous landlord could also be a bad credit reference if you had any issues with them. This includes issues with payments, but also just getting along in general.

    Friends and family members will most likely say good things about you, but because of their personal connection to you, won’t always be considered a reliable choice. Although friends and family are great to ask, they won’t carry as much weight as an employer, coworker, or past landlord.

    Character references

    If you don’t have a credit history and need someone to provide a character reference, you may instinctively go to your friends and family. If possible, reach out to a coworker, neighbor, or even someone you volunteer with instead. They can offer a more unbiased opinion of your character.

    What’s included in a credit reference letter?

    When asking people to write credit references for you, let them prepare a letter and that you’ll add in relevant information. Make sure any reference letter has:

    • Your name
    • Current address
    • And email and phone number

    Make sure the letter is going to your prospective landlord, so ask whoever is writing it to include your landlord’s name, address, and email. You may even want to send them sample letters to make it easier to write one for you.

    If you’re simply responding to a request for credit references by providing a landlord with a list of contacts, make sure each entry has their:

    • Name
    • Contact information
    • Relation to you

    For example, if you were listing your current landlord, the entry would look like this:

    Mr. Joe Landlord, joeland@landlord.com, Current Landlord

    Lease agreement

    Other forms of credit reference

    There are several different types of credit references that support credit reports and your actual credit score. They don’t necessarily have to be a note written by a specific person. Supporting documents can also add depth to your personal financial situation.

    Additional supporting documents include:

    • Checking or savings account history
    • Public records
    • Retirement funds statement
    • Pay stubs and/or W-2 forms

    Each of these different forms and documents may positively impact your application to a potential landlord. They add greater detail to your credit history that goes beyond a single number. All these documents come together to help establish your creditworthiness.

    Financier support documentation

    A credit reference may also come in the form of financial support documentation. This type typically comes from a family member or friend who agrees to co-sign your lease agreement or act as a guarantor for your rental payments. This type of reference is particularly helpful if you don’t have strong credit references and are trying to counter negative items in your credit history.

    Employment references

    Employment references are another type of credit reference used to show that you’re a responsible tenant. A current or previous employer can provide an employment reference, but make their letters include your job title, dates of employment, and salary.

    Asset documentation

    Asset documentation is a type of credit reference that shows your financial stability, which translates to your ability to pay rent. It includes bank statements, investment account statements, and retirement account statements.

    Rental history

    Your rental history is another type of credit reference that landlords may check. Your rental history includes information about your previous rentals, such as whether you made your payments on time, how long you stayed in each rental, and whether you left behind any damages.

    Utility services references

    Utility references help demonstrate your ability to pay bills on time. They include information about your electricity, gas, water, and trash bill payments. Rent is just another bill when you get right down to it, so your pattern of payment with these smaller bills can help influence your creditworthiness for bigger ones.

    When in doubt, include a credit reference letter

    A credit reference adds depth to that potentially deceiving credit score. Even if your landlord doesn’t request credit references, consider adding in a few to really show who you are as a renter. Ensure they illustrate how responsible you are and how likely you are to pay rent on time. Coming from the right sources, credit references can help your application, and hopefully get you the rental.

    Alison Bentley

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  • Home equity is near a record high. Tapping it may be tricky due to high interest rate

    Home equity is near a record high. Tapping it may be tricky due to high interest rate

    Cultura Rm Exclusive/twinpix | Image Source | Getty Images

    Home equity is near all-time highs. But tapping it may be tough due to high interest rates, according to financial advisors.

    Total home equity for U.S. mortgage holders rose to more than $17 trillion in Q1 2024, just shy of the record set in Q3 2023, according to new data from CoreLogic.

    Average equity per borrower increased by $28,000 — to about $305,000 total — from a year earlier, according to CoreLogic. That’s up almost 70% from $182,000 before the Covid-19 pandemic, said chief economist Selma Hepp.

    About 60% of homeowners have a mortgage. Their equity equals the home’s value minus outstanding debt. Total home equity for U.S. homeowners with and without a mortgage totals $34 trillion.

    The jump in home equity is largely due to a runup in home prices, Hepp said.

    Many people also refinanced their mortgage earlier in the pandemic when interest rates were “really, really low,” perhaps allowing them to pay down their debt faster, she said.

    “For the people who owned their homes at least four or five years ago, on paper they’re feeling fat and happy,” said Lee Baker, founder, owner and president of Apex Financial Services in Atlanta.

    Baker, a certified financial planner and a member of CNBC’s Advisor Council, and other financial advisors said accessing that wealth is complicated by high borrowing costs, however.

    “Some options that may have been attractive two years ago are not attractive now because interest rates have increased so much,” said CFP Kamila Elliott, co-founder of Collective Wealth Partners and also a member of CNBC’s Advisor Council.

    That said, there may be some instances in which it makes sense, advisors said. Here are a few options.

    Home equity line of credit

    Grace Cary | Moment | Getty Images

    A home equity line of credit, or HELOC, is typically the most common way to tap housing wealth, Hepp said.

    A HELOC lets homeowners borrow against their home equity, generally for a set term. Borrowers pay interest on the outstanding balance.

    The average HELOC has a 9.2% interest rate, according to Bankrate data as of June 6. Rates are variable, meaning they can change unlike with fixed-rate debt. (Homeowners can also consider a home equity loan, which generally carry fixed rates.)

    For comparison, rates on a 30-year fixed-rate mortgage are around 7%, according to Freddie Mac.

    More from Personal Finance:
    Buying a house of ‘Home Alone’ or John Lennon fame? Expect a premium
    A 20% down payment is ‘definitely not required’ to buy a house
    What to expect from the housing market this year

    While HELOC rates are high compared to the typical mortgage, they are much lower than credit-card rates, Elliott said. Credit-card holders with an account balance have an average interest rate of about 23%, according to Federal Reserve data.

    Borrowers can generally tap up to 85% of their home value (minus outstanding debt), according to Bank of America.

    Homeowners can leverage a HELOC to pay off their outstanding high-interest credit-card debt, Elliott said. However, they must have a “very targeted plan” to pay off the HELOC as soon as possible, ideally within a year or two, she added.

    For the people who owned their homes at least four or five years ago, on paper they’re feeling fat and happy.

    Lee Baker

    certified financial planner

    In other words, don’t just make the minimum monthly debt payment — which might be tempting because those minimum payments would likely be lower than a credit card, she said.

    Similarly, homeowners who need to make home repairs (or improvements) can tap a HELOC instead of using a credit card, Elliott explained. There may be an added benefit for doing so: Those who itemize their taxes may be able to deduct their loan interest on their tax returns, she added.

    Reverse mortgage

    A reverse mortgage is a way for older Americans to tap their home equity.

    Like a HELOC, a reverse mortgage is a loan against your home equity. However, borrowers don’t pay down the loan each month: The balance grows over time with accrued interest and fees.

    A reverse mortgage is likely best for people who have much of their wealth tied up in their home, advisors said.

    “If you were late getting the ball rolling on retirement [savings], it’s another potential source of retirement income,” Baker said.

    A home equity conversion mortgage (HECM) is the most common type of reverse mortgage, according to the Consumer Financial Protection Bureau. It’s available to homeowners who are 62 and older.

    Here's how to get an ultra low mortgage

    A reverse mortgage is available as a lump sum, line of credit or monthly installment. It’s a non-recourse loan: If you take steps like paying property taxes and maintenance expenses, and using the home as your primary residence, you can stay in the house as long as you like.

    Borrowers can generally tap up to 60% of their home equity.

    The homeowners or their heirs will eventually have to pay back the loan, usually by selling the home, according to the CFPB.

    While reverse mortgages generally leave less of an inheritance for heirs, that shouldn’t necessarily be considered a financial loss for them: Absent a reverse mortgage, those heirs may have been paying out of pocket to help subsidize the borrower’s retirement income anyway, Elliott said.

    Sell your home

    Alexander Spatari | Moment | Getty Images

    Historically, the biggest advantage of having home equity was amassing more money to put into a future home, Hepp said.

    “That’s historically how people have been able to move up in the housing ladder,” she said.

    But homeowners carrying a low fixed-rate mortgage may feel locked into their current home due to the relatively high rates that would accompany a new loan for a new house.

    Moving and downsizing remains an option but “that math doesn’t really work in their favor,” Baker said.

    “Not only has their home gone up in value, but so has everything else in the general vicinity,” he added. “If you’re trying to find something new, you can’t do a whole lot with it.”

    Cash-out refi

    A cash-out refinance is another option, though should be considered more of a last resort, Elliott said.

    “I don’t know anyone right now who’s recommending a cash-out refi,” she said.

    A cash-out refi replaces your existing mortgage with a new, larger one. The borrower would pocket the difference as a lump sum.

    To give a simple example: let’s say a borrower has a home worth $500,000 and an outstanding $300,000 mortgage. They might refinance for a $400,000 mortgage and receive the $100,000 difference as cash.

    Of course, they’d likely be refinancing at a higher interest rate, meaning their monthly payments would likely be much higher than their existing mortgage, Elliott said.

    “Really crunch the numbers,” Baker said of homeowners’ options. “Because you’re encumbering the roof over your head. And that can be a precarious situation.”

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  • How to use your credit card responsibly – MoneySense

    How to use your credit card responsibly – MoneySense

    What is a credit score?

    A credit score is a three-digit number, usually between 300 and 900, that banks and other lenders use to determine how likely you are to pay back your loans. The higher the number, the more credit-worthy you are to the banks.

    Your score is based on information in your Canadian credit history, such as whether you pay for your phone bill and utilities on time and in full each month. The problem is, for newcomers and others without a Canadian credit history, lenders don’t have any information. This makes it hard for people to get credit.

    Your first credit card in Canada

    If you’re young, or a newcomer, or you haven’t used credit in Canada before, you’ll need to start simply. Credit cards themselves are forms of credit, so the first step is to get an entry-level credit card and prove your credit-worthiness by paying your bills on time. Then you can work your way up.

    Entry-level credit cards usually have fewer perks than more premium cards, but they also typically have lower income requirements and a lower annual fee—in some cases, $0.

    National Bank’s mycredit Mastercard is a great example. There’s no annual minimum income requirement to apply for this card and no annual fee, making it very accessible. And, while the mycredit Mastercard doesn’t come with a full suite of included benefits, it does allow you to earn 1% cash back on recurring bill payments and restaurant spends, and 0.5% back on everything else.

    If you want more features and rewards, National Bank’s Platinum Mastercard is a good option that also has no minimum income requirement. National Bank’s World Elite Mastercard has an annual fee of $150 and comes with more perks—including an annual travel expense refund up to $150.

    4 tips for credit card use

    You already know you should use your credit card responsibly, but what, exactly, does that mean?

    • Stick to your budget
      Most entry-level credit cards come with modest credit limits. Still, it’s important you don’t spend more than you can pay off, no matter your limit. This is sometimes tricky for new credit cardholders, but budgeting is an essential part of your financial health.
    • Pay your card balance in full
      Best practice is to pay off your credit card, in full and on time, every month. Interest rates on credit cards are very high, so debt can balloon quickly if you carry a balance. Stick to your budget and don’t overspend.
    • Pay the minimum amount
      If, for any reason, you can’t pay a bill in full, make sure you pay at least the minimum amount, which appears on your bill. Credit card companies report your payment history to the credit bureaus, and even one missed payment will lower your score. You can avoid that by making the minimum payment (or more) by the due date.
    • Pay your bill on time
      Timeliness is as important as making minimum payments. It shows the credit bureaus that you can meet your financial obligations. If you need help remembering your due date, consider setting up an automatic payment through your online banking. 

    When it comes to credit cards, you should work towards paying in full, on time, every month. Every payment helps you build your credit score buy showing you are responsible with credit, and over time, you can become eligible for upgraded financial products, with more features and perks.

    Keph Senett

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  • What happens if you get rejected for a credit card? – MoneySense

    What happens if you get rejected for a credit card? – MoneySense

    Having a delinquency on your credit report can also make it more challenging to get approved for a credit card as banks see you as a high-risk applicant. Whether you’ve missed a payment or experienced a financial setback that led to your debt going to collections, having a delinquency on your record can significantly impair your credit score and make it very hard to get approved for most credit cards. So, if you do have a delinquency on your report, work to resolve the issue and settle any amounts in collections before applying for new credit.

    5. You’ve applied for a lot of credit recently 

    Applying for several credit cards in a short time can be a red flag. Lenders can view this as a sign of desperation for credit and worry that you’re borrowing more than you can handle, which could affect your ability to make the minimum payments. 

    In addition, every new credit-card application generates a hard inquiry that will lower your credit score. Hard credit inquiries account for 10% of your credit score so it is important to only apply for new credit products you need, one at a time. If you’re rejected for a credit card, wait between three and six months before reapplying to limit the impact of hard inquiries. 

    6. You have too much debt 

    If you already have a lot of debt through loans, mortgages and high credit-card balances, opening a new credit card could be seen as a warning sign to lenders that you are having problems paying down your existing balances. They might flag you at a higher risk of defaulting and reject your application. 

    When it comes to assessing your creditworthiness, lenders focus not just on the amount of debt you owe, but also look at how much of available credit you’re using. This is known as credit utilization, which makes up 30% of your credit score. Try to keep your utilization under 30% of available credit for maximum positive impact on your score. For example, if you have $10,000 in total credit available to you, try not to carry a balance of more than $3,000 at any given time. This shows lenders you can manage your credit responsibly.

    7. There’s an error on your credit file 

    If you’ve been turned down for a credit card (even if you have an excellent credit score), but have no debt and a clean payment history, it’s worth checking your credit report for errors. Incorrect payment details could be affecting your credit score—and, in turn, your eligibility to get approved for new credit. 

    You can identify this by reviewing your credit report regularly to see what’s documented and make sure the information is correct. For no charge, you can remove incorrect information by filing a dispute directly with the credit bureau.

    8. You don’t meet the age requirements

    In Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Prince Edward Island, you must be at least 18 years old to obtain credit. In all other provinces and territories, the minimum age is 19. If you don’t meet these age requirements, your credit card application will automatically be denied, so hold off until you are eligible. 

    Doris Asiedu

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  • Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle – MoneySense

    Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle – MoneySense

    “They will do all the comparisons for you, across all the different providers, and you can organize a list based on: I prioritize Air Miles, I prioritize cash back, I prioritize low interest rates,” Marques said. 

    “They’ll compare all the providers with best in class in those categories, and show you their current rates, their current signup offers, et cetera.”

    As for younger consumers, Marques said low interest rates aren’t typically a priority, assuming you aren’t already managing a lot of credit card debt and you’re not transferring a balance.

    Instead, travel rewards and cash back from your favourite retailers are likely the biggest returns on your spending, she said. Options with no annual fees are also valuable for someone just starting out, although there will be fewer rewards.

    Can you negotiate with credit card issuers?

    When getting a new card, there isn’t much room for negotiation, Terrell said—what you see is what you get. If you want different or better perks, the provider will just point you to another card that offers them.

    Negotiations come into play if you already have debt, Marques said, or are transferring debt between cards to take advantage of the lowest rate. 

    Using signup offers—such as zero interest for the first 12 months—with a balance transfer means you can get a break from interest and pay down your balance faster, she said. Or if you want to keep your current card, you can simply call your provider and move your balance to a lower-interest option.

    “There is an opportunity to negotiate their interest rates or even negotiate on your annual fees,” Marques said. “I think a lot of consumers don’t realize that if you just call and ask … in a lot of cases, they will.”

    The Canadian Press

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  • Couples and credit scores: How your partner’s credit can affect yours – MoneySense

    Couples and credit scores: How your partner’s credit can affect yours – MoneySense


    Should I get a joint credit card with my partner?

    While your partner’s credit score won’t directly impact your credit score, joint accounts or adding the other as a co-applicant will. The one exception is adding your partner as an authorized user to your credit cards and banking accounts. 

    When added as an authorized user, your partner is able to use the credit card but cannot make any changes to the account. Their credit will also not be impacted in any way. However, when a partner is added as a co-applicant, they have to go through the required credit checks and both partners’ credit is impacted based on usage of the account.

    Joint accounts can be beneficial when both partners are on the same page with money. For example, a joint account can give you access to a larger borrowing limit. It also can simplify your finances and foster feelings of partnership. However, depending on your partner’s money habits, sharing a joint credit card could be a real risk to your money and your credit score.

    If either of you miss a payment on a joint account or run up a large balance, each of your credit scores can take a hit. On the other hand, if you and your partner always make your payments on time, both of you will see improvement in your credit scores as the joint account will show up on both of your credit reports. 

    Getting extra credit through a joint credit card might seem like a good idea, be sure to assess each of your financial situations before doing so as gaining new credit can influence financial behaviours. Be critical about how having more or less credit affects your ability to live within your means and pay off your debt in full each month. If you or your partner have any debt, the focus should be on paying it down. Only consider a new, joint credit card if you have paid off your individual debts first.

    How to maintain healthy credit history (and prevent debt) as a couple

    Before combining finances in any way, such as joint credit cards or loans, it is imperative that you and your partner are in agreement and have the same expectations. To maintain healthy credit and prevent debt, consider the following five things: 

    1. Make sure your partner is someone you can trust to properly budget by having open and transparent conversations about money. 
    2. Set boundaries on how the joint account or loan will be used, as well as spending limits. Some couples ensure they both agree on a purchase beforehand, whereas others may check in at the end of the month to ensure all spends are accounted for—it’s good for catching credit card fraud, too, since you never assume it was the other person.
    3. Agree on who will make payments to ensure they’re made on time.
    4. Decide the amount you each will contribute to shared expenses. Will it be 50/50 or a percentage based on your incomes?
    5. Discuss what happens if one of you can’t make a payment due to income loss or illness. What’s your backup plan?

    Money isn’t worth fighting about—but it’s worth talking about

    Discussions about finances aren’t always easy. They might cause stress, tension and arguments with your partner. But, the more you practice communicating with honesty and intention, it does become easier. 

    None of this is to say your partner having a sub-par credit score should be a deal breaker. In fact, it’s fairly simple to start rebuilding credit. As professionally certified credit counsellors with Credit Canada, we often help couples understand their credit and address debt. If you need additional support, contact us today to book a free credit-building counselling session.



    Sandy Daykin

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