How to maintain a good credit rating
Being late in paying those unwelcome credit card bills
will cost you, big time. Not only will you be socked with climbing
interest rate charges, you may lose your most valuable financial
asset: a good credit rating.
The following payment tips and strategies will show
you how to whittle down debt and maintain a stellar credit rating
at the same time.
Start with the monthly statements
Disregard the fine print at your risk! And we're not
kidding about the fineness of the print. We compared several credit
card statements for this article. The information on the back pages
was not only printed in a tiny font, but the pale gray ink was barely
legible. In sharp contrast, the front page summaries were all in
bright, bold print.
Put on your specs -- back-page fine print
Here are examples of the critical information given
in that tiny type:
- You must promptly and carefully examine the statement and notify
the issuing creditor "in writing" of any errors. If
you fail to do this within 30 days of the statement date, the
statement and every item on it will be considered correct.
- Allow at least 7 business days for your payment to be processed.
- Any amounts shown as "overdue payment" or "over
limit" should be paid as soon as you receive your statement.
- If your account goes into default, the creditor can demand the
balance in full and no longer send monthly statements. However,
interest will continue to accrue on your account.
Easy steps to speed up your payments
- Be diligent about making payments on time. Any late or missed
payments can affect your credit rating. To avoid late payments,
make all payments before the due date.
- If you are paying by snail mail, use the pre-printed envelope
provided by the credit card company.
- Include the billing slip and be sure to write the amount being
paid in the designated box.
- Don't scribble. Make sure cheques are legible and the payment
amount is correct. Write the credit card number on the cheque.
And don't forget to sign the cheque.
- Pay the minimum amount immediately. Paying the credit card issuer
the minimum payment as soon as possible is a great way to guard
against late fees.
- Use online or telephone payments. Paying bills online or by
telephone can be a great buffer against late fees. Most major
issuers now accept payment by these quick-and-easy methods. But
beware: An increasing number of banks charge a substantial fee
for the privilege of paying by phone.
Want to know your credit rating?
To get a free copy of your credit report, contact
Equifax Canada or TransUnion Canada, the two major credit reporting
- Equifax Canada, Box
190, Jean Talon Station, Montreal, PQ, H1S 2Z2, or 1-800-465-7166.
- TransUnion Consumer Relations
Department, P.O. Box 338, LCD1, Hamilton, ON, L8L 7W2, or
1-866-525-0262. In Quebec, write to TransUnion (Echo Group), 1600
Henri Bourassa Boul Ouest, Montreal, Quebec, H3M 3E2, or call
Lucy Lazarony is a staff writer for
Bankrate.com. Diana Cawfield is a freelance writer in Toronto.