If you are in the market for a home or a new car, you are probably very familiar with your credit score. Lenders are one of the primary users of credit scores and it can have a huge impact on whether you get approved for a loan and just how much interest it is going to cost you. What isn’t well known about credit scores is where they come from, what makes them go up (or down!) and who else besides potential lenders uses them to make decisions? Your credit score is going to be with you for life, so why not take a couple of minutes to get the facts.

1. There are two credit-reporting agencies in Canada: Equifax and TransUnion. Your credit score may vary between the two. Lenders may check one or both agencies when you apply for credit.
2. Your credit score is actually derived from the data in your credit report — which can be had for free once per year from Equifax and TransUnion. Some banks, credit unions, and other financial services companies provide your credit score for free as part of their services.
3. Credit scores range between 300 and 900 with the Canadian average being 650.
4. Your credit score is used for a lot more than just borrowing money; insurance companies, mobile phone providers, car leasing companies, landlords, and employers may all require your credit score to make decisions.
5. Five factors affect your credit score: length of credit history, credit utilization or how much of your limit you have used, the mix/types of credit you hold, the frequency you apply for credit, and your payment history.
6. Mistakes and omissions are not uncommon and it’s a good idea to check the details of your credit report. Both agencies have a process to report errors and get them corrected.
7. Credit scores of 700+ are considered “good” and offer a higher chance of loan approval, greater borrowing limits, and lower or “preferred” interest rates and insurance premiums.
8. Credit scores are continuously evaluated and adjusted. If you have “errored” in your past, the damage is not permanent! Your score can be raised/rebuilt by using credit responsibly (see #10).
9. Checking your credit score regularly is a good idea and will help detect errors, monitor improvements, and identify fraud. This is a “soft” enquiry and will not affect your score.
10. To increase your credit score: make payments on time, pay the full amount owing, use 35% or less of your available credit, hold a variety of credit types, and apply for new credit sparingly.

Don’t make the mistake of ignoring your credit score. Even if you aren’t looking to borrow money anytime soon, there are a lot of reasons to keep an eye on it.

written by DLC Chief Economist Dr. Sherry Cooper

Enriched Academy was launched back in 2013 after a successful appearance on the TV show Dragons’ Den by co-founders Kevin Cochran and Jay Seabrook. Although they would have loved to appear on the hit TV show MythBusters as well, fact-checking financial advice just didn’t have the mass appeal of learning whether one could survive on a desert island with only a pallet of duct tape.

Undeterred, Kevin and Jay set out to investigate the issue and educate the Canadian public about the most common financial myths out there. After many years on the case, here are their top four.

Myth #1: You need money to make money.
Careful investing is the secret to building wealth and you do need an income to get started, so this myth is not entirely untrue. However, what most people don’t realize is that the amount of money you need to make money can be surprisingly small. Financial guru Dave Ramsey’s research group found in their survey that 70% of millionaires never earned a 6-figure income. Former BC school teacher Andrew Hallam wrote an entire book devoted to how he leveraged a modest teacher’s salary with some basic investing principles to fund an early and very comfortable retirement. Check out his best-selling financial bible the Millionaire Teacher if you are wondering how he did it!

This myth is busted!

Myth #2: Money is too complicated.
Managing your money isn’t complicated, it just that having too little (or too much) leads to a lot of issues that make it seem complicated. Enriched Academy offers plenty of free webinars where you can easily pickup all kinds of financial knowledge with just one-hour of your time. While one short webinar may just get you started, the fact is that mastering a wide variety of money skills doesn’t take as much time or effort as many of the other things we spend time trying to learn. A lot of us spend more time learning how to use some app on our phone or make the perfect pasta sauce than we do learning how to manage our money.

The knowledge required to effectively manage your money is not difficult to learn — this myth is busted!

Myth #3: Investing is too risky.
It might be easy to say this one is true given the abysmal performance of most financial markets in 2022. Investing can be risky, but you can learn how to monitor and adjust your risk to suit your targeted returns, life stage, and other factors affecting your risk tolerance.

Your investing timeline also plays a huge role. Investing for the short-term is always going to be a lot more hit and miss than holding a well diversified portfolio of equities and other financial assets over a number of years. Financial markets have a long history of proven resiliency, and they will recover. Given current inflation and interest rates and the chance they will persist for some time makes investing and even greater priority these days

This myth is busted!

Myth #4: Earning money is more important than saving money.
Careful field research by an endless stream of bankrupt athletes, actors and reality TV has-beens has proven that when it comes to cash, “the more you earn, the more you burn!” The belief that more income is a sure-fire solution to your financial difficulties is busted! Carefully tracking your spending, making wise spending decisions, and adjusting your spending appropriately to “enjoy life more” as your income rises is the golden rule, regardless of how much money you are making.

Money myths can be debilitating and can put all sorts of mental obstacles in your path that just don’t need to be there. Financial literacy will help you separate fact from fiction and give you the right mindset to overcome whatever money beliefs may be holding you back.

written by DLC Chief Economist Dr. Sherry Cooper

When it comes to the winter season, it can be easy to go overboard when it comes to heating – but there is a better way! With a little awareness – and the right preparation – heating your home this winter won’t have to cost you a fortune. To help you save, we have put together a few helpful tips to reduce heating costs:

1. Inspect Your Heat Sources – Regardless of whether you rely on a fireplace, gas or baseboard heating, it is always a good idea to have all heat sources inspected for efficiency.

2. Check Your Fireplace – It is recommended to keep your fireplace damper closed, unless there is a fire burning. Otherwise, it is the same as having your window wide-open during the winter! For those of you with a fireplace you never use, now might be a good time to plug and seal the chimney to keep warm air from escaping.

3. Manage Your Thermostat – As tempting as it is to turn your heat all the way up in the winter, proper thermostat management will help you save costs in the long run. A thermostat with a timer is a great option to help you save this winter. Turn it on earlier so the room heats up in time for use, instead of cranking the heat when you need to get warm quickly and have it turn off 30 minutes before bed or before leaving the home. If you find you are chilly at night, a safely positioned space heater and closed door is a far more inexpensive choice.

4. Close The Door – To keep your heating system from working too hard, close doors when rooms are not in use. This prevents heat transfer in and out of vacant rooms, and will ensure the space you’re currently using remains warm and cozy.

5. Be Mindful of Drafts – Checking for drafts is another important way to reduce heating costs. If you notice any issues, using a weatherstrip or caulking to seal doors and windows is a relatively inexpensive fix that can have a huge savings impact on your heating bill.

written by DLC Chief Economist Dr. Sherry Cooper