Personal Finance

Ask me about Credit Scores

  • Last Updated:
  • May 24th, 2018 10:40 am
Deal Addict
Dec 28, 2010
1088 posts
101 upvotes
Ajax
eagerbeaver83 wrote:
Jan 29th, 2018 7:29 pm
I have not done almost anything other than paying my bills on time!!!

Two months ago my utilization ratio was 75% and last month it was 10%. I always pay the current balance (not the statement balance) one week before the deadline.

Also I have set auto payment which pays two 25$ per month just in case I forget to pay the minimum payment in case of emergency...

I might have overpaid (more than current balance) last month! (by 5 to 10 dollars). I do not if it was the cause!

1. So what is the cause for this sharp score decrease?

2. What is the delay between credit check and actual reduction in credit score? Could it be two months?

3. Is it possible that Honda has done a hard credit check on me?

Thank you!
75% utilization seems to be the culprit if I had to guess.
Deal Addict
Jan 15, 2017
1147 posts
836 upvotes
No, I see no reason to wait 2+ years. The usual way to start rebuilding is getting a secured credit card, and this could be started about 6 months after discharge. It is practically pointless to apply for an unsecured card with a new bankruptcy on your credit report. Credit that does not have collateral attached to it is the most difficult credit to get, so a regular credit card will be quite difficult.

There are no quick fixes to repairing and raising your credit profile. It takes time. The reason people with high credit scores have high credit scores is because they have demonstrated over time that they are responsible with their credit.
Deal Addict
Sep 11, 2006
1320 posts
244 upvotes
skeet50 wrote:
Jan 30th, 2018 2:27 pm
Canadian mortgage interest rates, with regard to "A" mortgages, are based on a met / not met basis. In general, a credit score of 650 will receive the same discounted interest rate as a credit score of 700, 750, 800+. Down payment amount will usually have an impact on mortgage interest rates with mortgages carrying mortgage default insurance receiving the best rates.

I am not aware of any way for a consumer to request a Beacon 9.0 score (the score used by the majority of mortgage lenders). Some people have simply asked their mortgage broker / bank rep what their score was, but this is a violation of the T&Cs of the agreement that the service provider has with the credit rating agency.

The credit scores from places like Credit Karma are real scores in that they are consumer educational scores. Of course, these scores are not used by credit lenders so they are worthless for determining credit worthiness. The adage, "You get what you pay for" holds true for these scores.
Really helpful/insightful comment, I didn't know this before thanks!
Sr. Member
Jan 31, 2007
957 posts
490 upvotes
Richmond Hill
I just look at my TU credit report. It said "Insufficient mortgage experience"
Well I pay off my house about 9 years ago, so I am mortgage free.
Is that a bad thing in regard of credit report that I own a fully paid off house and mortgage free?
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Aug 24, 2016
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Where am I? That is …
cheapshopper wrote:
Feb 1st, 2018 4:10 pm
I just look at my TU credit report. It said "Insufficient mortgage experience"
Well I pay off my house about 9 years ago, so I am mortgage free.
Is that a bad thing in regard of credit report that I own a fully paid off house and mortgage free?
That is only a reason why your score is not higher.
There is certainly nothing wrong with paying your mortgage off early.
Keep all account paid and up to date, utilization low, and inquiries to a minimum, and that will ensure a good credit score.
Also keep in mind, that not all scoring algorithms factor in mortgage trade lines.
Deal Addict
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Sep 19, 2013
1375 posts
374 upvotes
Winnipeg
Curious question: When do good standing closed credit cards get dropped from the credit report? My last closed credit card is from 2012.

Is it 7 years or forever?
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Jr. Member
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Jan 20, 2018
114 posts
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Toronto
amitdi wrote:
Feb 2nd, 2018 3:22 pm
Curious question: When do good standing closed credit cards get dropped from the credit report? My last closed credit card is from 2012.

Is it 7 years or forever?
Good standing closed CC gets purged from Equifax after 7 years, and up to 20 years from TransUnion.
TU holds positive credit info longer than Equifax (Canada).
Jr. Member
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Jan 20, 2018
114 posts
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Toronto
skeet50 wrote:
Jan 30th, 2018 6:27 pm
No, I see no reason to wait 2+ years. The usual way to start rebuilding is getting a secured credit card, and this could be started about 6 months after discharge. It is practically pointless to apply for an unsecured card with a new bankruptcy on your credit report. Credit that does not have collateral attached to it is the most difficult credit to get, so a regular credit card will be quite difficult.

There are no quick fixes to repairing and raising your credit profile. It takes time. The reason people with high credit scores have high credit scores is because they have demonstrated over time that they are responsible with their credit.
+1 couldn't have said it better myself skeet50

If I may add (and I apologize if this information has been posted elsewhere on RFD, this is just a reminder to those who are Discharged from Bankruptcy (in Canada), after serving their 9 months, the Trustee will give you a Certificate of Discharge, which is very likely required when applying for any secured CC, whomever the lender is, they will request this Certificate.

I would personally suggest to those already Discharged, apply for a secured HT Visa card, your limit is calculated from the amount of funds you deposit (1:1 ratio) $500 deposit will be your limit ( up to a very generous $10,000 credit limit )

Then 6 months later, apply for a secured Capital One Guaranteed M/C, this card is also a "hybrid" secured card, if you quality, Cap One may require a deposit anywhere from $75, up to $300, depending on your credit history.

Once Capital One sees flawless payment history, they may up to their discretion, mail you a letter, "we're increasing your credit limit to either $1,000, some users of RFD have had their cards upped to $4,500, another 6 months later, will graduate you to an unsecured card.

Don't quote me on the timing, or the amount, this is an observation I've read, and actually people I know.

Once Capital One receive the funds, they will issue you the CC and you can increase your limit (up to a max of $2,500, although $1,000 is preferred, and more than enough).

Between Home Trust and Capital One, they both report your activity after the first statement to Equifax Canada, and TransUnion Canada.

Don't bother applying for ANY unsecured CC, especially right after Bankruptcy, NO lender will approve you.

You'll be hearing the words "no, and declined" for awhile, until 1-3 years of positive CC trade activity, and of course, they will be reported to both Credit Bureaus, only then would I suggest to anyone to move up the credit ladder to an unsecured card (for those without Bankruptcy in your credit reports, the likelihood of approval is good).

To those with Bankruptcy in their credit report, just continue on using, and paying your statement in full if you can, or at the very least, the required minimum payment, and don't ever go above 80% of your limit, potential lenders/creditors see this as "maxed" accounts, hence why your credit score drops.

Do not ever make late payments, under any circumstances, your credit score will tumble and it will take time to fix it again, just like skeet50 said above.

If you have any questions, I'll try to answer as soon as I can, thank you in advance for letting me share my knowledge on RFD.

Hope this helps anyone out there, who is either looking to re-establish / rebuild their credit, or has just emerged from Discharged Bankrupt in Canada.
Newbie
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Jan 23, 2018
56 posts
45 upvotes
Guruguido wrote:
Feb 4th, 2018 10:18 am
+1 couldn't have said it better myself skeet50

If I may add (and I apologize if this information has been posted elsewhere on RFD, this is just a reminder to those who are Discharged from Bankruptcy (in Canada), after serving their 9 months, the Trustee will give you a Certificate of Discharge, which is very likely required when applying for any secured CC, whomever the lender is, they will request this Certificate.

I would personally suggest to those already Discharged, apply for a secured HT Visa card, your limit is calculated from the amount of funds you deposit (1:1 ratio) $500 deposit will be your limit ( up to a very generous $10,000 credit limit )

Then 6 months later, apply for a secured Capital One Guaranteed M/C, this card is also a "hybrid" secured card, if you quality, Cap One may require a deposit anywhere from $75, up to $300, depending on your credit history.

Once Capital One sees flawless payment history, they may up to their discretion, mail you a letter, "we're increasing your credit limit to either $1,000, some users of RFD have had their cards upped to $4,500, another 6 months later, will graduate you to an unsecured card.

Don't quote me on the timing, or the amount, this is an observation I've read, and actually people I know.

Once Capital One receive the funds, they will issue you the CC and you can increase your limit (up to a max of $2,500, although $1,000 is preferred, and more than enough).

Between Home Trust and Capital One, they both report your activity after the first statement to Equifax Canada, and TransUnion Canada.

Don't bother applying for ANY unsecured CC, especially right after Bankruptcy, NO lender will approve you.

You'll be hearing the words "no, and declined" for awhile, until 1-3 years of positive CC trade activity, and of course, they will be reported to both Credit Bureaus, only then would I suggest to anyone to move up the credit ladder to an unsecured card (for those without Bankruptcy in your credit reports, the likelihood of approval is good).

To those with Bankruptcy in their credit report, just continue on using, and paying your statement in full if you can, or at the very least, the required minimum payment, and don't ever go above 80% of your limit, potential lenders/creditors see this as "maxed" accounts, hence why your credit score drops.

Do not ever make late payments, under any circumstances, your credit score will tumble and it will take time to fix it again, just like skeet50 said above.

If you have any questions, I'll try to answer as soon as I can, thank you in advance for letting me share my knowledge on RFD.

Hope this helps anyone out there, who is either looking to re-establish / rebuild their credit, or has just emerged from Discharged Bankrupt in Canada.
That's really quite helpful information and the kind of credit rebuild road map I was looking for, Guruguido, thanks for posting
Deal Addict
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Jul 13, 2014
2761 posts
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Miami
Had a guaranteed CapOne card (not the secured one) for about 5 years. Haven't missed a single payment and I usually pay before my statement is made.

Yet they haven't increased my limit. I have a cards with 10k limits yet my CapOne is stuck at 1k.
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Jan 23, 2018
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MayorOfToronto wrote:
Feb 5th, 2018 12:36 pm
Had a guaranteed CapOne card (not the secured one) for about 5 years. Haven't missed a single payment and I usually pay before my statement is made.

Yet they haven't increased my limit. I have a cards with 10k limits yet my CapOne is stuck at 1k.
Should I assume that you've called and asked for a limit increase and they just said no, or are you waiting for them to do it without any prompting?
Deal Addict
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Jul 13, 2014
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Miami
threadhead wrote:
Feb 5th, 2018 12:55 pm
Should I assume that you've called and asked for a limit increase and they just said no, or are you waiting for them to do it without any prompting?
Trying to request it online isn't allowed for this card. They state something along the lines of "we continuously review accounts and will increase your limit when we see fit"

Tried calling in twice (about 6 months apart) and got a fat no.
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Jr. Member
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Jan 20, 2018
114 posts
47 upvotes
Toronto
threadhead wrote:
Feb 5th, 2018 12:32 pm

That's really quite helpful information and the kind of credit rebuild road map I was looking for, Guruguido, thanks for posting
Anytime, threadhead, i know this info has been posted on RFD forums but that post is in my own words, and what works for those who are looking to rebuild their credit.

To put it in another perspective, once any person starts to use secured Credit Card(s), even if they have/had negative tradesline on their bureau, in 2+ years time, users will start to see that positive tradesline will outweigh the negative (keep in mind your score will naturally "correct" itself, and fluctuate - don't obsess with checking scores every single day. That's just ridiculous now.
You'll pull on your own hair.

Only time can heal negative stuff (public records, collections, bad cheques written (NSF) may also show up (depends on Province and/or FI policy reporting NSF to all credit bureaus.

I remember I was previously stating on this exact thread a few pages back, I said to monitor your TU credit record and/or Equifax, use Credit Monitoring Services via (TU) TransUnion of Canada and/or Equifax Canada.

On a separate note, I didn't have much favourable opinions about CK about 2 months ago, but I have to admit now, it's one of the best products on the Internet, and it's absolutely free!

I wasn't too keen on recommending CK, until now.

TransUnion recently changed their method of reporting using the "CreditVision Risk Score" model back on January 23, 2018, if I'm not mistaken, which uses trended data vs their older reporting traditional model.

This recent model is now used by many potential lenders so we can now have a more accurate picture of where we stand regarding our creditworthiness.

My score jumped from 606 to 704, an almost 100 point jump from end of Jan to Feb 2018.

I'm sure it's because of the new model.
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Jan 20, 2018
114 posts
47 upvotes
Toronto
MayorOfToronto wrote:
Feb 5th, 2018 12:36 pm
Had a guaranteed CapOne card (not the secured one) for about 5 years. Haven't missed a single payment and I usually pay before my statement is made.

Yet they haven't increased my limit. I have a cards with 10k limits yet my CapOne is stuck at 1k.
There's alot of factors determining why Capital One hasn't upped your current limit of $1K, even after 5 years of flawless payment activity as you say.

If I had to answer this, my guess is Capital one thinks;
#1 you either have enough credit extended under your name.
#2 there's something on your credit report that is not favourable (collection perhaps) hence why Cap One is hesitant on increasing your unsecured CC limit.
#3 your utilization ratio is high on your other CC account(s), which is a red flag to Capital One.
#4 correct any potential errors on your credit report.

Keep on using, and paying your Capital One account.
It's a matter of time before they will review your account, and automatically give you a credit limit increase.

Hope this helps, these are just suggestions, I haven't seen the whole picture, so it's difficult to come up with a more accurate answer, or solution.
Newbie
Nov 18, 2017
48 posts
6 upvotes
How does having a large, new HELOC available to me ($200k) that I will likely only lightly use affect my credit score? My utilization so far is very low, but in credit card form, no lines of credit. If I want to use it for short term investments and move most of the $200k in and out of the account, would that mess with my score, since my utilization will oscillate between 10% and 80% of total credit?

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