October 1, 2007

Your Credit Rating

The surest way to establish your credit is to work yourself into the position of not needing any. --- Maurice Switzer

Credit is a system whereby a person who can't pay gets another person who can't pay to guarantee that he can pay. --- Charles Dickens
As thanks for being a valued client, my bank keeps inviting to spend more money on them. I keep saying no to their offers but they keep calling. The latest is "an invaluable service that helps you manage your credit rating and protects you against credit fraud and identity theft". Who wouldn't want protection against that? Unfortunately, the price is $15 per month. I'm guessing that tax also applies. That's $180 a year. Maybe that's a reasonable price for peace of mind?

Because I'm so special, I was offered a free report on my credit and 30 days to cancel without penalty. I've never seen a credit report. So I said yes.

Good, Not Excellent
My credit score is Good. The categories are Weak, Fair, Good and Excellent. This is puzzling, because my score is over 90%, but that's only enough to put me into the top 50%-75% of the Canadian population. However, I am "very likely to get approved for new credit, get the best rates and be charged a lower amount of deposit in situations where deposits are often required".

Information Contained
The range of information is scary
  • year/month of birth
  • court records
  • legal items
  • collection items
  • accounts: credit cards, mortgage, car lease, line of credit
  • addresses: current and two prior
  • employer: current and two prior
  • inquiries made by others (most recently from my phone company 11 months ago and my bank 20 months ago)
The Depth
Here's an example of how much detail there is. I opened a line of credit in Feb 1993 and closed it in Mar 2007. It says "pays account as agreed" and that "account paid closed closed at consumer's request". The credit limit is shown.

Going Forward
Luckily, there were no surprises in my credit history. The precautions I'm taking to prevent identity theft seem to be working too. So this service isn't worth the ongoing cost. I phoned, got through right away and spoke to a pleasant person who quickly cancelled the service. There was no pressure or need to explain. So the overall experience was positive.

We get concerned about our privacy. A credit report shows that lots is available easily. It's interesting to see the contents. No need to worry ... yet.


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