Planning a move abroad, whether for employment, retirement, or a lifestyle change, raises a number of questions. Where will I live? What is the cost of living? Can I handle the culture shock?

While financial considerations play an important role in a decision to move abroad, many future expatriates wait until it’s too late to ask one vital question: Will my credit score follow me abroad? It’s an important query whether you have good or bad credit. But, the answer isn’t quite as simple as yes or no.

Put simply, your credit score won’t follow you abroad, but your payment history and debts will. Let’s take a closer look.

CREDIT SCORES VARY FROM COUNTRY TO COUNTRY

Your credit scores apply to your credit history in the United States and indicate your creditworthiness as a U.S. citizen. If you choose to move abroad, your current credit score will have little to no influence on your ability to borrow money in your new home country. That’s true whether you move to Toronto or Timbuktu.

That doesn’t mean other countries don’t use credit scores. Many do. Some countries’ credit scoring systems feel more familiar than others. Canada’s system, for example, shares many traits with the U.S.’s. Here’s a snapshot:

• Canada’s two major credit bureaus are TransUnion Canada and Equifax Canada
• Credit scores in Canada range from 300 to 900 (FICO and Vantage scores range 300 to 850 in the U.S.)

In the United Kingdom, simply registering to vote can help improve your credit score. Lenders use the Electoral Roll to confirm identifying information like your name and address. If you’re not on the Electoral Roll, your application could be delayed or even denied.

YOUR HISTORY STILL MATTERS

Even though you won’t take your credit score with you, your credit past might as well be an extra piece of luggage — it’s coming too. Unless you plan on living exclusively from cash, you’ll need to secure a loan or credit at some point during your time abroad.

When applying for a new credit card or for a new loan outside of the U.S., your credit history will be examined by potential lenders. They might not look at your score, but they’ll still see the credit history that’s resulted in the score.

MAINTAINING YOUR U.S. CREDIT RATING

If you plan to return to the United States, or even visit frequently, be sure to maintain (or improve) your credit. Continue paying down those credit card accounts and any other loans you have. If you plan to keep or rent out your American home, ensure you’re still making timely mortgage payments.

With an eye toward returning, also make sure to keep your existing accounts active. Make purchases on Amazon or pay any recurring bills (Netflix, Prime, or other digital subscriptions) with your U.S. credit cards.

If you’re planning to move abroad, or have recently moved, and want to repair your credit, a lawyer can help. Lawyers understand consumer protection laws and can help leverage your legal rights so that your credit reports remain fair and accurate.

The lawyers and Law can help you repair your credit. Contact us for a free credit repair consultation, including a complete review of your credit report summary and score.

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A big influence on your credit score is credit utilization — the percentage of your credit limit that you are currently using. That scoring factor is one reason your credit score could drop a little after you pay off debt. Having low credit utilization (30% or less) is good; having no credit utilization may be harmful to your score.

Credit utilization is one reason your credit score could drop a little after you pay off your debt.

Some of the other factors that affect your credit score also could come into play. Paying off an installment loan, like a car loan or student loan, can help your finances but might ding your score. That’s because it typically results in fewer accounts. (That’s not a reason not to do it! Don’t stretch out a loan and pay more in interest just to save some credit score points.)

Age of your credit accounts, whether you’ve recently applied for credit and what kinds of credit you have also can affect your score. Here’s a breakdown of the factors that affect your credit scores in order of importance:

How to pay off debt and help your credit score

If you focus on credit card debt first, it can help your budget (cards tend to have higher interest rates than installment loans) and your score too (if you lower your credit utilization).

Credit utilization is calculated both on a per-card and overall basis. If you have any credit cards that are charged up to anywhere close to their limits, make it a priority to lower your balance(s) to no more than 30% of your limit — and lower is better.

Here are other habits to keep in mind:

• Pay on time, every time. Late payments can seriously damage credit.
• Keep credit cards open. That is, unless you have a compelling reason for closing them, such as an annual fee or poor customer service. When you close an account, it can reduce your average account age. It also cuts your available credit, which sends utilization up.
• Use credit lightly. If you no longer love the card, consider putting a small, recurring charge on it, and putting it on autopay so that the issuer won’t close the card because of inactivity.

How do I keep my credit score from dropping?

Once you’ve gotten your balances to zero, here’s how to guard your credit.

Make it easier to pay on time. Set up reminders to pay bills. You can set up calendar reminders, or get emails or text alerts from most issuers.

Watch for credit report errors. Any attempt to build your credit will be fruitless if the data going into your scores is wrong.

You can get free credit report information two ways: Some personal finance websites, including NerdWallet, offer report information on demand. And once a year you’re entitled to a free report directly from each of the three credit bureaus.

You can ask for a free copy of your credit file by mail. There are two national credit bureaus in Canada: Equifax Canada and TransUnion Canada. You should check with both bureaus.

Complete details on how to order credit reports are available online. Basically, you have to send in photocopies of two pieces of identification, along with some basic background information. The reports will come back in two to three weeks.

The “free-report-by-mail” links are not prominently displayed — the credit bureaus are anxious to sell you instant access to your report and credit score online.

If you can’t wait for a free report by mail, you can always get an instant credit report online. TransUnion charges $14.95. Equifax’s rate is $15.50.

To get your all-important credit score, you’ll have to spend a bit more. Both Equifax and TransUnion offer consumers real-time online access to their credit score (your credit report is also included). Equifax charges $23.95, while TransUnion’s fee is $22.90. There is no free service to access your credit score.

You can always try asking the lender you’re trying to do business with, but they’re not supposed to give credit score information to you. 

What if I find an error in my credit report?

Well, you won’t be the first. In millions of files and hundreds of millions of reported entries, there are bound to be mistakes. Some are minor data-entry errors. Others are damaging whoppers. For example, we’ve heard of instances where negative credit files from one person got posted to the file of someone who had a similar name (the “close enough” school of credit reporting).

Some credit bureau watchers estimate that there are errors in 10 to 33 per cent of credit files. Some of those mistakes can be serious enough to hurt your credit status. That hit to your credit score can result in a denied loan or a higher interest rate. Across Canada, provincial consumer agencies collectively get hundreds of complaints annually about credit bureaus.

If you find something in your file that you dispute, you can write the credit agency in question and tell them you think there’s an error. The credit reporting agency usually sends along the form you need when it sends you the credit report. Use it to spell out the details of any information you dispute. The dispute forms are online, too.

Be sure to send along any documents that support your version of the matter in dispute. The reporting agency then contacts whoever submitted the information you’re disputing.

If the file is changed, you will be sent a copy of your new report and any company that’s requested your credit file in the previous two months will also be sent the corrected file.

If the item is not changed to your satisfaction, you have the right to add a brief statement to your credit file with your side of the story. You can also ask to have your credit file, along with your comment on the disputed entry, sent to any company that has requested your credit report in the previous two months.

You can also file a complaint with your provincial consumer agency.  

What are credit monitoring services?

If you spot entries in your credit report that don’t seem to relate to you (such as charge accounts you never opened or bad debt notations you never got), you may be a victim of the rapidly-growing crime of identity theft. You should notify the credit reporting company immediately.

There are companies that will take the effort of checking your credit report off your hands — for a price. The credit reporting bureaus are, not surprisingly, very active in this area. At TransUnion, their credit monitoring service costs $14.95 a month and includes unlimited access to your credit profile and credit score. At Equifax, credit monitoring and identity theft protection starts at $16.95 a month.

Let’s start with the simple answer: You can check your credit score however often you want to. The common myth that checking frequently negatively impacts your score is just that, a myth. However, just because you can check your credit score whenever your want doesn’t mean that you always should, or, will need to. This simple guide will quickly help determine when and how checking your credit score is right for you.

Understanding Your Credit Score?

In order to understand your credit score, first you have to understand your credit report. A credit report is a record of how you manage your money. These reports contain a history of balances, payments, accounts, inquiries and other pieces of personal information that lenders use to evaluate whether or not to extend your credit. If you have a credit card or a loan, you have a credit report. Credit scores are calculated from the data contained in your credit report. Generally, scores range between 300 and 850. Typically, the higher the number, the better the score. Both credit reports and credit scores are

In order to understand your credit score, first you have to understand your credit report. A credit report is a record of how you manage your money. These reports contain a history of balances, payments, accounts, inquiries and other pieces of personal information that lenders use to evaluate whether or not to extend your credit. If you have a credit card or a loan, you have a credit report. Credit scores are calculated from the data contained in your credit report. Generally, scores range between 300 and 850. Typically, the higher the number, the better the score. Both credit reports and credit scores are important tools when it comes to managing personal finances but it’s not always clear how your score is calculated. See the chart below for an explanation of the components that may make up your score.

When to Check Credit Score?

Deciding when to check your credit score depends on your comfort level. For some, checking annually is sufficient. However, many prefer checking their credit scores monthly or even weekly. It’s important to remember that you can check your credit score as much as you’d like without impacting your score. In fact, tracking your progress may give you more insight into what’s affecting your score. Be careful to avoid focusing too much on day-to-day changes and instead identify overall trends. Some situations in which you may want to check your score more frequently can include: Deciding when to check your credit score depends on your comfort level. For some, checking annually is sufficient. However, many prefer checking their credit scores monthly or even weekly. It’s important to remember that you can check your credit score as much as you’d like without impacting your score. In fact, tracking your progress may give you more insight into what’s affecting your score. Be careful to avoid focusing too much on day-to-day changes and instead identify overall trends. Some situations in which you may want to check your score more frequently can include:

• Opening a new credit card.
• Applying for a loan.
• Starting a mortgage.
• Searching for a new job.
• Building or rebuilding credit.
• Protecting against identity theft.

When Not to Check Credit Score?

Even when you’re in good standing, it’s important to routinely check and ensure that the good credit you’ve established remains stable. If your credit score is on the lower end, don’t ignore it. However, it is not always necessary to check your credit score daily. Checking too much can cause anxiety. Small or daily changes are normal and should not be a cause for concern. 

How to Check Credit Score?

There are many ways to check your credit score. By law, you are entitled to a free credit report from all three major credit reporting agencies once a year, including TransUnion, Equifax and Experian. Additionally, some monitoring services allow you unlimited access to your credit information year-round. These services could help you spot inaccuracies, potential fraud and more on your credit report.

Checking your credit score can be easy and stress free with the right tools and online monitoring services.

Credit scores are based on information in your credit report, so it’s important to make sure your credit report is complete and accurate. You want to make sure there are no errors lurking on your reports and making you look bad. Here’s information on how to order your free credit reports.

Of the different credit scoring systems, the most widely used is FICO. Another is VantageScore, which is offered by the three credit reporting bureaus. If you want to see these scores, you can purchase FICO at www.myfico.com and VantageScore from www.equifax.com, www.experian.com and www.transunion.com. (Note: the score you purchase may be different from the score your lender uses — either because it’s a different scoring system or because you saw it at a different point in time.)

In certain instances – for example, if you’re denied a loan based on your credit score — you are entitled to see the score that the lender used, at no charge.

What’s a Good Credit Score?

The range of scores depends on the scoring system used. With FICO, the most widely used system, scores range from 300 to 850 (though no one ever achieves a perfect 850). Scores above 760 are considered excellent; those consumers have an easier time getting credit at good rates. Scores between 725 and 759 are still very good.

A good credit score starts at a base rating of 650 and goes as high as 900. The higher your score, the more trustworthy you seem to banks, lenders, employers, even landlords.

TransUnion and Equifax, Canada’s two major credit reporting agencies, calculate your credit score and use it to gauge how likely you are to make payments on a credit card or a loan. A good score means credit agencies and financial institutions consider you a reliable borrower because you are likely to handle debt loads responsibly. So if you have a rating of 650 or above, you’re considered low-risk. Once you hit 750, you’re in the “excellent” range, which is often lumped into the “good” category.

Here are some factors that may be used in determining a credit score:

 Your bill-paying history. This is a biggie. If you pay your bills late, have gone into collections or foreclosure or have declared bankruptcy, it will hurt your score.

 The number and type of accounts you have. It’s good to have established credit accounts, but on the other hand, having too many credit card accounts can look bad. Depending on the scoring system, having a loan from a finance company can have a negative effect on your score.

 Outstanding debt. Many scoring systems compare the amount of debt you have to your credit limits. If you look “maxed out” that will hurt you.

 How long you’ve had your accounts. If you’re a credit newbie, if can bring down your score. But paying on time and having low debt can help.

 “Inquiries” on your credit report. If you’ve recently applied for credit, an inquiry will show up and this can drop your score.

 Other info. Some scoring models for mortgage lending may look at the amount of your down payment, your total debt, your income and other factors.

Under federal law, credit scoring systems aren’t supposed to take into account race, sex, marital status, national origin or religion, though they can use age as a factor.

How Can I Raise My Credit Score?

How can you raise your score? If your score isn’t where you want it and it’s not because there’s an error on your credit reports, remember the old saying: Time heals all wounds – or a lot of them, anyway. Pay your bills on time, get rid of outstanding balances and don’t take on more debt and your score will go up over time.

1. Aging of Negative Items in Your Credit Report

Events such as bankruptcy, foreclosure, or late payments are examples of negative items that affect your credit score. These events remain on a credit file for a number of years. A late payment, for example, remains on a credit file for about seven years. As these events age and move into the distant past, hwoever, the affect they have on your credit score diminishes. As a result, as these items age, all other things being equal, your score can go up.

2. Changes in Revolving Credit Balances

Changes in revolving credit balances can cause credit scores to fluctuate. Credit card balances, for example, can change from month-to-month as you use your card, whether you’re paying off your balances in full or not. As your balances go up, your credit utilization goes up.

Credit utilization is calculated by dividing the amount of your debt on a credit card by your credit limit. For example, let’s assume you have one credit card with a $5,000 balance and a $10,000 credit limit. So $5,000 divided by $10,000 is 0.5, meaning you would have a credit utilization of 50%.

FICO looks at credit utilization both on an account-by-account basis and on an overall basis. The lower the utilization, the better. According to Tom Quinn of FICO, it’s best to aim for a credit utilization of no more than 20 to 30%.

One thing to keep in mind is that these revolving balances can change from month-to-month. Hence, your credit utilization also changes. If it goes up over a threshold that FICO finds significant, your score could drop. If it goes down and crosses a threshold that FICO finds important, your score could increase.

3. Age of Accounts in Your Credit History

As your credit file and accounts age, your score can improve. FICO looks not only at your oldest account, but also at the average age of your accounts. While this factor may not have a significant affect in any given month, it can cause scores to increase when accounts cross an age threshold that FICO finds significiant.

4. Changes in the FICO Formula

FICO changes its formula periodically. FICO is continually trying to improve its formula to make it a more accurate indicator of credit risk. The same is true for non-FICO credit scoring formulas. The result is the multiple versions of the FICO formula are in use at any one time. When a new version is applied to your credit file, it can result in changes to your score.

5. Applying for New Credit

Applying for new credit could lower your credit score. We don’t know if Lakisher applied for new credit. But if she did, this could explain some of the drop in her credit score. Generally, however, inquiries are not a significant factor in the FICO formula.

6. Scorecard Hopping

Another explanation to changes in a credit score is that you may have been placed in a new scorecard. Called, scorecard hopping, this occurs when FICO places a consumer in a new scorecard. FICO doesn’t simply lump every consumer into the same pot and evaluate us all equally. They put us in what they call different scorecards.

FICO provides very little information about its scorecards. One scorecard that most believe exists, however, is for those who have a bankruptcy on their record. Scorecards enable FICO to evaluate the risk of similarly situated consumers. Your credit score depends in part on which scorecard you are in (and there’s no way to know which one

Now, scorecard hopping occurs when FICO moves a consumer from one scorecard to another. For example, if a bankruptcy is removed from a consumer’s credit file, they will be moved out of the bankruptcy scorecard into another scorecard. What’s interesting here is that even though you might get moved into a better scorecard, your credit score can actually move lower as a result of that change.

Why? Because you are now being compared to a different group of consumers. You may have done well when compared to others who have filed for bankruptcy. After the scorecard hop, however, you are now being compared to a very different group of consumers. Long term the switch should help, but in the short term it can lower your score.

7. Late Payments

This is the most critical causative factor for credit score fluctuations. Even one 30-day late payment can significantly affect your credit score. A late payment stays on your credit file for up to 7 years. Even if you’re doing everything else right, a single late payment can have a significant, negative impact on your credit score.

There are many things that can lower your credit scores. Some things, like missing a payment, shouldn’t come as a shock, but others, like closing an account, may come as a surprise.

Here are some common reasons why your credit scores may drop and the credit factors that contribute to them.

1. You’ve missed or made a late payment

Your payment history is typically the most important credit factor used to calculate your credit score. It tells lenders how likely you are to repay debts in the future.

If you’ve missed payments or made late ones, lenders may be hesitant to extend credit to you — or may offer you credit, but at a higher interest rate. The longer you make your payment after your due date, the more it could affect your credit scores.

And if your payment is past due and sent to a collection agency or you declare bankruptcy, it can also adversely affect your credit scores and stay on your credit report for six or seven years.

2. Your credit utilization is too high

Your credit utilization is typically the second most important credit factor when it comes to how it affects your scores. It may also be called “use of available credit.”

To determine your credit utilization, add up the balances on your various credit products, such as credit cards, lines of credit and car loans, and divide the total by your total credit limits.

Lenders are most concerned about how much credit at your disposal you’re actually using, not your credit limits on their own. Even if you keep making payments on time, you’re seen by lenders as a higher risk of default if your credit utilization is high.

3. You recently closed (or opened) an account

If you’ve recently opened or closed a credit account, this can negatively impact your credit scores. Generally speaking, the longer your credit account is open and in good standing, the more it may help to improve your credit health.

This means that if you close an old credit account, such as the first credit card you signed up for in university, and your other credit accounts are relatively new, your scores could drop.

For example, if you’re doing a balance transfer from an old credit card to a new credit card to take advantage of a low introductory interest rate and you close your old account, that may cause your credit scores to drop.

3 tips for improving your credit health

If your credit scores are not as high as you’d like them to be, there may be things you can do to help improve your credit health.

Tip #1: Don’t make late payments.

If possible, aim to always make your credit payments in full by the due date.

If your cash flow is tight, try to at least pay the minimum payment (you can find this on the statement from your lender) to keep your credit account in good standing.

If you’re unable to make the minimum payment, let your lender know immediately to see if a special arrangement can be made, such as spreading your payment over a longer period of time or negotiating a lower interest rate.

“To make sure you never miss a payment, I recommend setting calendar reminders to log in and make payments to your credit accounts twice per month. This could help ensure that you’ll never be late for a payment and give you ample opportunity to review your statements and recent transactions for inaccuracies and fraudulent charges,” says Stephen Weyman, personal finance blogger at HowToSaveMoney.ca.

Tip #2: Keep your credit utilization below 35 percent.

The Financial Consumer Agency of Canada recommends keeping your credit utilization at less than 35 percent of your total available credit. Generally, having high credit utilization may hurt your score as your lender may view you as more likely to default.

For example, if you have two credit cards with a $6,000 total limit, try to keep your combined balances below $2,100 (35 percent of your $6,000 total available limit).

Tip #3: Keep your older credit accounts open.

While it may be tempting to close older credit accounts that you no longer use, consider keeping them open. For example, it might be worth keeping your first credit card, even if you seldom use it, provided there’s no annual fee.

If your credit card has an annual fee and you’re not using it, consider closing or downgrading it to a non-annual fee version (if available as an option).

Be sure to use your credit card every so often to avoid an inactive fee or your issuer closing your account. An inactive fee is a fee charged by credit card providers if you don’t use your credit card for a time period (typically at least a year).

Parents place the utmost attention on their children’s safety, education, health and happiness, but even the most conscientious parent may overlook another matter that can affect their child’s future: the child’s credit report.

With some exceptions, most children under age 18 should not have a credit report. Minors, however, are not immune to identity theft and credit fraud. So you need to check if your youngster has a credit report – and you need to know what is on it.

“Ideally, and in the vast majority of instances, your child would not have a credit report,” says Rod Griffin, director of public education for credit reporting agency Experian. “It’s a good idea for a parent to check.”

Checking is especially important if you suspect your young child is the victim of identity theft. Teens also should check for credit reports in their names if they suspect someone may be using their identity and Social Security number to open fraudulent accounts.

Unless identity theft and credit fraud are caught and corrected, they can hinder a child’s ability to get loans, jobs or housing once they reach adulthood.

Protect your child’s financial future

In some cases, a child might legitimately have a credit report. For example, a teen might have one if a parent authorized him as a user on a credit card.

In most other cases, however, the existence of a credit report tied to a child is a sign of nefarious activity. Identity thieves can use a child’s Social Security number to open credit card accounts, apply for loans or government benefits or rent an apartment, the Federal Trade Commission notes.

“It’s a good idea to check whether your child has a credit report close to the child’s 16th birthday. If there is one – and it has errors due to fraud or misuse – you will have time to correct it before the child applies for a job, a loan for tuition or a car, or needs to rent an apartment,” the FTC says on its website.

Do not delay if you see signs that credit thieves already have established a report in your child’s name.

The Identity Theft Resource Center cites several warning flags, including:

• Calls from collection agencies, bills or credit cards sent to your home in your child’s name.
• A child receiving preapproved credit card applications, or government notices related to taxes, benefits or even traffic violations.
• A child having a bank account application denied because of poor credit history.
• The mere existence of a credit report in the child’s name.

For example, each of the bureaus provides specific directions for requesting a minor child’s credit report. Making a request is the first step in clearing the record if an inaccurate or fraudulent file exists.

For more information, review our step-by-step instructions for requesting a child’s credit report from each bureau. Otherwise, below is a summary of the rules for the three credit bureau:

• TransUnion offers an online form to help determine whether your child may be an identity theft victim. If the company finds a credit file on your child, it will seek more information from you.
• Equifax instructs parents to contact its Minor Child Department in writing, and to provide copies of the child’s birth certificate and Social Security card, proof that you are the child’s parent or legal guardian, and a copy of your driver’s license or other government identification. Equifax says it will notify you and remove the child’s file if it exists.
• Experian requires parents to mail in or digitally submit documentation if they want to know whether the company has a credit file on their child age 13 or younger. Experian provides a form for doing so. If a child does have a credit history, Griffin says, Experian will add a security alert to the file, include a note to say the child is a potential fraud victim, and freeze the file at no cost. When the child is older, he or she can lift the freeze and have access to his or her report, Griffin says.

Your FICO® scores (an acronym for Fair Isaac Corporation, the company behind the FICO® score) are credit scores. It’s a sort of grade based on the information contained in your credit reports. Unlike the grades you were given in school — A through F — base FICO® scores generally range from 300 to 850. And the higher, the better.

Because there are three major consumer credit bureaus (Equifax, Experian and TransUnion), each with its own version of your credit report, you can also have different credit scores. For example, you can have a FICO® score based on your Equifax® credit report, a FICO® score based on your Experian® credit report, and a FICO® score based on your TransUnion® credit report. To further complicate things, you can also have VantageScore® credit scores from each bureau.

Additionally, FICO also creates many different credit-scoring models for lenders in different industries. So your base FICO® scores may not be the same ones a mortgage lender sees if they request your mortgage-specific FICO® scores, for example.

You probably don’t need to worry about all these nuances when buying a home, but you should still have an idea of what your scores look like. You can get your VantageScore® 3.0 credit scores (based on similar factors to your FICO® scores) from Equifax and TransUnion for free on Credit Karma.

How do my FICO® scores affect my ability to get a mortgage?

Lending a huge amount of money is risky business. That’s why mortgage lenders need a good way to quantify the risk, and your FICO® scores — with all of the data and research that go into them — fit the bill.

Different lenders have different requirements for their loans. And because there are many different types of mortgages from many different types of lenders, there’s no one single minimum FICO® score requirement.

How can my FICO® scores affect my mortgage interest rate?

When a loan officer gets your mortgage application, they may use a pricing grid to figure out how your credit scores affect your interest rate, says Yves-Marc Courtines, a chartered financial analyst with Boundless Advice. Generally, higher scores can mean a lower interest rate, and vice versa.

From there, a mortgage loan officer will likely look at the rest of your loan application to decide whether your base interest rate needs any adjustments. For example, if you’re making a smaller down payment, you may be given a higher interest rate, says Courtines.

A bank’s pricing grid may change on a daily basis depending on market conditions. However, here’s an example of what you might expect your base interest rate to be, based on your credit score, on a $216,000, 30-year, fixed-rate mortgage.

Credit scoring is used by lenders, insurers, landlords, employers, and utility companies to evaluate your credit behaviour and assess your creditworthiness.

1. Applying for a loan. Your credit score will be a big factor into the decision of whether you are approved or denied your application for more credit. Your credit score will also affect the interest rate and credit limit offered to you by the new credit grantor – the lower your credit score, the higher the interest rate will be and the lower the credit limit offered  – the reason for this is you are considered more of a credit risk.

2. Applying for a job. A potential employer may ask your permission to check your credit file and based on what they read, they may decide not to hire you due to your poor credit history. Yes, having bad credit could cost you a job!

3. Renting a vehicle. When you sign an application to rent a car, the rental company can check your credit history to determine what their risk may be when they loan you their property. So although you are not applying for credit, the application documents you sign provide your written permission to access your credit information.

4. The same is true when applying for rental housing – the landlord may assess your tenant worthiness and their risk by factoring in your credit rating and score, and they could pass you over for someone with a better credit rating.

Other “derogatory” factors which negatively affect your credit rating and the Credit Bureaus don’t like to mention to you are:

1. Errors
One of the major causes of point loss to your credit rating are bureau reporting errors. (They can also cost you financially as shown in the CBC report on credit reporting mistakes) Errors can be delinquent accounts reporting on your file that do not belong to you, late payments that were not late, and credit that is created from identity fraud  – therefore not your credit. The Credit Bureaus are paid by the creditors who pull credit bureau files and in turn who report to them. Credit reporting is done electronically, and Credit Bureaus accept the information they are sent without any investigation into the accuracy of the information. Therefore, is it critical that you pull your credit bureau file at least once every year. Only you will know when there is an error on your file, and it is up to you to have the credit bureaus fix it.

Order your file here: TransUnion and Equifax

Look for these common errors:

• Wrong mailing addresses
• Incorrect Social Insurance Number
• Signs of identity theft
• Errors in your credit accounts
• Late payments
• Unauthorized hard inquiries

If there is an error on your file you must contact the Credit Bureau, then it is up to the Bureau to investigate your complaint and to verify the information contained in your file by contacting the reporting creditor. When contacted by the Credit Bureau, the reporting creditor will have to verify the item they have placed on your file. You are entitled to be part of that process.

2. Moving/Time at Address
As previously discussed, a large number of credit file requests within a short period due to moving will lower your credit score. But on top of that, the length of time at your current address will influence your score, so try not to move a lot as it will affect your credit rating. The longer you remain at one address, the more points you receive.

3. Changing jobs/employers frequently
The longer you stay at a job, the higher points your credit score receives. You are seen as having a secure job and therefore being a secure, less risky credit consumer.

4. Having no mortgage, or no housing information on your file
The Credit Bureaus assign certain points for those who have mortgages and those who rent, and deduct points for those whose housing situation is unknown to them. As soon as you pay off your mortgage, the reporting account is removed from your file and you are in the unknown category, which will actually remove points from your credit rating! Credit card and other credit account history will remain on your account even after being paid off and closed, but unfortunately a paid mortgage does not benefit your credit rating. Imagine, you own your own home and that does not benefit your credit rating – does that even make sense? Also, not all mortgages report to the Credit Bureaus.

5. Having high revolving credit balances
When you have high balances that are rotating between different credit accounts, this is a warning sign that you could be in financial trouble and therefore you could be considered a credit risk.

6. Having no debt
Believe it or not, having no debt is bad for your credit score! Here we go again – if you don’t need to borrow money creditors will be trying to throw it at you. If you do need to borrow money and have no debt or debt history well, you will have a harder time of it. If you do not have a history of credit use on your file to provide something for creditors to evaluate, they will see that as a risk, and you will be deducted points on your score for not having credit accounts.