Obtaining Your FREE Credit Score!
The purpose of this is to help creditors gauge your ability to pay back a loan.
Normally, this wouldn't really concern me as we don't carry any debt or have a line of credit. However, our mortgage term will be up in less than a year. As such, we're going to need to start laying the groundwork to achieve a great credit score in order to get the best rate possible when renewing.
Every year, I would obtain wifey and my free credit report. This would contain information like the kind of credit (like credit cards, line of credit, car financing, etc.) you have under your name, how much access to credit you have, how frequent you make payments, the amounts remaining on each account, etc.
However, a new service popped up a short time ago that gives you access to a free credit score! This is provided by a company called Borrowell in partnership with Equifax.
I'm not sure how it works. However, according to their statistics, 86% of Canadians do not know their credit scores. Which makes sense. Most of the time, you need to pay $15 to access your credit score.
According to the Borrowell site, they want to help Canadians improve their credit score but you can't improve it if you're not sure where it's at.
So who is Borrowell? Seems they are a digital lender of money. I suppose by offering free credit scores, it would be good for business. Personally, I don't need to borrow money, but I suppose it could be convenient for some.
Anyway, signing up was very easy. Just needed to fill out the form and confirm the email address. After clicking the confirmation link in the email, you are taken back to the site to verify your identity. These questions are asked based on your credit history report provided by Equifax. Things like which phone number you've had since 2002, or what account did you open in September 2010. After confirming your identity, by answering all questions correctly*, you are taken to a page that displays your credit score with Equifax (Transunion is different).
I scored in the 741 - 900 range which is considered Excellent. No surprises there as we don't max out the card each month and we only buy what we need (groceries mainly) with our credit cards for the rewards and pay off the balance in full when the statement arrives.
Wifey was in the same range as my score. Also Excellent. However, her score was slightly lower. We think it's because she has a shorter credit history than me. Plus, she doesn't use her cards anymore. We mainly use my cards for the rewards and convenience of having everything on one or two statements.
In addition to giving you access to your credit score, Borrowell will also provide updates every so often (I recall reading somewhere it was every 3 months. I can't find it, so I could be incorrect). I suppose this will allow people to see progress when trying to repair their credit.
In short, free credit scores are a good thing. Long term, it doesn't really mean much at the end of the day if you're in a position where you don't have a mortgage or consumer debt. If you don't borrow money, you won't have a credit score. You could have $1 million dollars in the bank, but if you've never borrowed money, you will have no credit history (why would you need to borrow money if you have $1 million dollars in the bank, anyway?).
Alternatively, you can have the greatest credit score, but still owe thousands of dollars in consumer debt (no one really knows how the system works. Remember, credits scores are constructed in a way that tells the lender how trustworthy you are credit wise. If you're paying the minimum payment each month, then your score may go up because you're going to be a great customer. At least, that's a common theory).
*If for some reason, you didn't answer a question correctly, you will need to call in to verify your identity. I'm not sure the process of this procedure as I answered my questions correctly.
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