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Credit rating question

Big Boss

TRIBE Promoter
Mastercard closed my credit card about 15 months ago because my balance was too high and I was late with payments 3 times in the 9 months previous. Anyway, I paid off the whole balance 5 months ago and I don't intend to ever use the card again (I've destroyed it).

I want to rebuild my credit rating though. Someone told me it's best to re-open the account but not use the card so my balance is always low, instead of sitting with a closed credit account. But, to do that Mastercard is going to check my credit rating, and that apparently will lower my score. I don't know if that is true or not, so that's why I am asking.

What can I do to improve my score?
 
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Thumpr

TRIBE Member
dude you're better than 90% of people. 3 lates, and you paid it all off.

demand a new card, and perks.
 

The Watcher

TRIBE Member
Your credit rating will improve over time.

Or get a credit card (While lowering your rating slightly). Use it periodically for small purchases and..... PAY IT OFF.

Tadaa! Good credit in 1 easy step.
 

TaCk OnE?

TRIBE Member
is there a free easy way to check your credit rating?

as far as I know, mine should be perfect....just curious if I can search that info or is it for bank types and the illuminati only
 

natureboy

TRIBE Member
From what i've heard, continuously "fishing" for cred will lower your rating. I don't think applying again will do anything. Get ahold of Trans-union and Equifax to keep on top of your rating/history.
BTW-don't pay the 20 bucks they want to get a PDF of your credit rating. Call then and ask them to mail it-it only takes two days and it's FREE.
 
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kuba

TRIBE Member
there is no way to check your credit for free

you'd have to go to equifax.ca and check through their system, it'll cost you $20

my bad- just read the comments above, i guess there is something like a free credit check! *good to know*
 
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justin surdit

TRIBE Member
Kuba - the credit bureaux that are produced for mailing are not anything like what you or I would see. They are in narrative format, with each account basically getting a paragraph. The other MAIN factor is there is no Beacon Score disclosed, so for the purposes of actual Credit Granting, it's useless.
 

lush191

TRIBE Member
chances are you will get approved for another card----the more credit cards you have the better your credit score(or FICO/U.S.) score will be(presuming that you aren't late making payments). As soon as you begin to cancel credit cards your credit rating will get smaller...and so will your chances of getting re-approved for more credit---credit lenders justify your 'worth' by your credit to debt ratio---so the more available credit you have the more 'secure' a credit company will feel when deciding whether or not to issue you credit!
 

SJN

TRIBE Member
kuba said:
there is no way to check your credit for free

you'd have to go to equifax.ca and check through their system, it'll cost you $20

my bad- just read the comments above, i guess there is something like a free credit check! *good to know*

There is somewhat recent legislation in Canada that makes it a requirement that individuals can obtain their credit report for free. How this actually works in practice, I don't know
 

JLV

TRIBE Member
Big Boss said:
What can I do to improve my score?

I work in Finance as a lender (so I see a million or so bureaus in a week) and the best thing you can do is not apply for anymore credit (for as long as you possibly can). Every inquiry docks points off your beacon score.

Did you close your MC account or did they close it?

Do you have any other active accounts (car lease, mortgage, HBC card)?
 

litespeed

Well-Known TRIBEr
what most likely happened.. and i know we do this with delinquent cards where is work.. is when you miss 3 payments like that.. we credit revoke the card.. meaning we suspend your privledges.. after making your payments on time for anywhere from 3-6 months.. we will reinstate your credit privledges.. just have to ask.. so chances are if you call them and ask for it to be reienstate.. they will do it for you no problem.. and you won't have to apply for another card and have any inquiries on your bureau.
 
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litespeed

Well-Known TRIBEr
SJN said:
There is somewhat recent legislation in Canada that makes it a requirement that individuals can obtain their credit report for free. How this actually works in practice, I don't know


I've heard this as well... you need to call them and they will mail the credit bureau.. i've also heard from people that did this that it took forever and a few calls to get it sent. you can check it online for under $20.. instant access.
 

groovespinna

TRIBE Member
you request a credit report online. it is 100% free. I just did it recently. you are entitled to it, and it is actually reccommended so you can keep an eye on things. mistakes are made all the time. Equifax and Trans Union are the big players. mostly the former Ive found.

mine arrived in the mail within 2 weeks. it's not a pain in the ass at all.
 

dora

TRIBE Member
I'm confused...
If making too many credit check requests can worsen your credit rating. Then why do they suggest checking your credit rating once a year? Isn't that going to make is worse?
 

justin surdit

TRIBE Member
it doesn't count as an inquiry when you request your own, only when a commercial company does it ie. bank, phone co., elelctric co., department stores etc...
 

Kazoo

TRIBE Member
Every credit inquiry, by someone other than yourself, shaves off 5 points to Empirica or Beacon score - the two credit ratings by Trans Union and Equifax respectively.
 
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TrIbAlNuT

TRIBE Member
Both my Visa and MC keep increasing my limit They said its because I keep paying off my balances, so the limit gets increased automatically. Is it bad to have a high limit but never use it?

Is there such a thing as a "soft" hit when it comes to credit scores checks?
 

Boo

TRIBE Member
I'm somewhat of an expert when it comes to consumer credit issues. For one reason or another.

The credit enquiries are either 'hard' or 'soft. Hard enquiries affect your score as they are credit 'requests' when you apply for a card, loan etc. Soft enquiries, such as you checking your own score, or a bank which periodically checks your file (to see if they want to increase your limit or something) without your requesting it, do not affect your score.

The amount of credit available does affect your rating. Contrary to what was said before, a high credit limit does affect your score negatively. They look at your credit/equity/earnings ratio. If you have 10 grand in available credit and a 30k job, you would be considered a high risk, since you 'potentially' could get into serious trouble.

Now if you owed 9 out of 10k, it would hurt even worse since you are close to your credit limit. Never carry more than 75% of your available credit. Companies like people who have credit but never need to use it.

Any requests in writing for a credit report are free, up to 2x a year. Online reports are quicker and cost $14.99, or $22.99 with a FICO score and a narritive which is quite useful to get to explain your report.
 

Boo

TRIBE Member
Also Visa and MC do not issue cards, the bank or lending company does.

Visa and MC etc are just a merchant network that facilitates purchases, like Interac does not issue your ATM card.

Anyways for this example, I would re-open the card, have 1 bill (utility) go through it and pay off the balance every month. Even faster to help your rating would leave 10% of the bill unpaid, every month, and pay off the 10% the next month so you always have a small balance. This actually helps your score better than paying off 100%.

If you don't have any bills subscribe to a newspaper. I did the star weekend and cost me $7 a month, builds up your credit, get 2 papers a week, and free airmiles
 
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TrIbAlNuT

TRIBE Member
Boo said:
The amount of credit available does affect your rating. Contrary to what was said before, a high credit limit does affect your score negatively. They look at your credit/equity/earnings ratio. If you have 10 grand in available credit and a 30k job, you would be considered a high risk, since you 'potentially' could get into serious trouble.

.
great info, thanks,
But i never ask BMO nor TD to increase my credit limit, and I never ever come even close to using half of it. I’m the kind of guy that pays of my credit card balance as soon as it starts accumulating. Should I ask my banks to decrease my credit limit? I don't want my credit score to suffer over something that I don't need nor use at all. I’m planning to buy a condo in the summer, so I want to make sure I play my financial card right.
 

Kazoo

TRIBE Member
Boo said:
They look at your credit/equity/earnings ratio. If you have 10 grand in available credit and a 30k job, you would be considered a high risk, since you 'potentially' could get into serious trouble.
.

That is wrong. The Fair-Issac (FICO) model which is the basis of the Emperica and Beacon scoring does NOT use income as one of the variables in equation.
 
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