You have pretty good credit, right? I mean, you’re not sipping margaritas on a private island under an assumed name with a trail of bad debts in your wake. You have a good job and always pay your bills on time. So what’s the deal with your substandard credit score then? We spoke with Patricia White, the executive director of Credit Counselling Canada, about how we hurt our credit rating without even realizing it. Just click on the slideshow below, and prepare to be shocked.
Six surprising ways you’re ruining your credit score
Not keeping an eye on that EquifaxThere are two credit reporting agencies in Canada: TransUnion and Equifax. It's free and easy to request a mailed copy of your credit report from each agency every year. There's no reason not to do it.Thinkstock
Maxing outHere's the trick, really. Creditors want to see that you can have access to credit without actually using it. Patricial White recommends keeping your utilization rate to 30% of your limit. So, if you have access to $1,000, try not to owe more than $300. Thinkstock
Playing it safeYou've had a few different credit cards for a long time, you never miss a payment and you never carry a balance. That's good, right? Wrong. To really impress your creditors and improve your rating, it's better to have different kinds of credit, like a loan, mortgage or line of credit in addition to credit cards. Thinkstock
Dumping an old credit card"Lots of people think it's a good idea to close that account," says White, "But it's not because you then lose the history that's there." Don't erase all the good credit history you've built up! Wait until you establish some history with the new account before closing the old one.Thinkstock
Going AWOLAs tempting as hiding away might be when things get tough, that's the absolute worst thing you can do. You should either try to make arrangements with your creditors directly or seek out free credit counselling such as that provided by Credit Counselling Canada. Thinkstock
Getting too much creditCreditors don't like to see that you've been applying for loans, credit lines and credit cards all over the place. Whenever a financial institution or other creditor runs a credit check, that's called a hard inquiry, and it shows up on your credit rating. Thinkstock