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Credit Advice & Questions


Credit Advice - "Common credit card questions - Should I close my old credit card?"    (Wednesday, October 16th, 2019)

This is the 4th  post in our 5 part series focused on:   "Common credit card questions - Should I close my old credit card?"

Q. I have an old credit card which I don't use anymore as I have a newer, should I close it?
A. No would be my first response and I will explain. In many cases it is this first credit card that is the trade line that a client has had the longest. Part of you credit score is calculated based on the time you have been on the bureau so if you have limited credit closing this card could have a negative effect on your score. If you have been on the credit bureau a long time and have had multiple loans and credit cards then closing this old card will generally have no effect. Just make sure before you close it you think about your credit timeline.

Q. I spoke to my bank about getting a loan and they told me I would need to close a credit card to get approved. Is this OK?
A. Again, based on whether this card represents your longest trade line on the credit bureau I would suggest instead asking if you could lower your credit limit on the credit card versus closing it. This way you retain the card and can continue to get the credit score benefit of having another positive trade line reporting to your bureau.

Feel free to contact us via email or live chat with your questions.

Next Wednesday's topic will be:  "Common credit card questions - Should I have more than 1 credit card?"


Posted: Facebook 10/16/2019

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FAQs


Q. Is this a loan?

A. No, the CreditCare.ca credit rebuilding program is designed to give you the ability to use your own savings as a new credit trade line to report to the credit bureau as a monthly payment. Each payment you make will improve your credit score. It is a unique program unlike anything else available.

Q. How can a CreditCare.ca agreement help me?

A. Simply put an improved credit score will allow you to have access to lower interest rates, will give you affordable lower monthly payments and save you thousands of dollars.

Q. When does it make the most sense to use CreditCare.ca to improve my credit score?

A. Ideally, before you make any large purchase such as a car or home improving your credit score beforehand will ensure that you are getting the lowest interest rate possible which will save you thousands of dollars over the term of your loan.

Q. Is there any benefit to CreditCare.ca if I am already in a high interest loan or if, due to circumstances, I must make a purchase before I fix my credit?

A. Yes, the faster we improve your credit the faster you can qualify for better rates and save money on interest payments.

Q. How long does it take to improve credit score?

A. Answer to how long does it take to rebuild credit varies on what is on your credit bureau. The good news is no matter what has happened in the past that is behind you!

Credit care is a great way to re-establish new credit when recovering from a recent bankruptcy, consumer proposal or credit counselling all of which have a huge impact on your credit score. You can use the CreditCare.ca program to rapidly improve your credit score and help you move toward your goals.

Q. Are you going to do a credit check?

A. No, there is no credit check required to set up your agreement.

Q. Are there any penalties for ending my agreement early?

A. No, your agreement can be cancelled at anytime without a penalty.

Q. Why would I choose a larger vs. smaller agreement amount?

A. While all agreements, no matter what amount, build credit score a larger amount shows potential creditors your ability to make and maintain a higher payment. Think of your credit score allowing you access to higher amounts of credit like steps on a ladder. The larger the amount the higher up the ladder you can access.

Q. How long should I keep my agreement active?

A. Each month your payment reports to the credit bureau there is a benefit to your credit score. To get the most benefit you would want to keep your agreement active for a minimum of 12 months. This benefits your credit score and shows future creditors your ability to pay consistently over time.

Q. Why do you also recommend getting credit cards to build credit?

A. A credit card or secured credit card that reports to the credit bureau gives you a smaller credit score boost but is a part of how to rebuild your credit. As you make your monthly payments it will increase credit score.

Q. Why does applying for credit frequently have a negative effect on my credit report?

A. Typically, every time you apply it costs points off your credit score. If you apply for a lot of credit it will cause your credit score to drop. This can make getting approved more difficult and result in a higher interest rate.

Q. What is the history of CreditCare.ca?

A. CreditCare.ca is a division of Finance West Inc., a Calgary based company established in 2010. CreditCare.ca was created to provide Canadians an opportunity to rebuild, repair or establish new credit at fair interest rates and payment options. More information on Finance West is available online at www.Financewest.ca



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