Protecting your credit today helps you buy a home tomorrow

You know how you're always asked at the checkout counter: "would you like to apply for our fill-in-the-blank Store Card? You can save $X dollars on your purchase today..."


Don't do it. These pitches – a common part of the retail experience – are a potential credit pitfall. Applying for these store cards generates a "hard" inquiry that goes on your record, and is visible to lenders looking at your report. Every time you seek credit by applying for a credit card, store card, or loan – you generate a hard inquiry. Too many inquiries will flag you as a potential credit risk because it signals credit desperation. You should keep these to a minimum.


There are exceptions, of course. If you are shopping for a loan or a mortgage, a lender will expect to see a short burst of inquiries against your credit score. It's best if these happen fairly quickly and around the time of a loan event.


There's also such a thing as a "soft" inquiry; only you can see these, and they do not impact your score. Potential employers might make an inquiry, for example. And when you check your own credit report, your inquiry is both invisible and irrelevant to your credit score.


Make a habit of checking your credit score each year – and watch how those good credit habits push your credit score skywards.


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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.


The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.


The next rate-setting day is October 22nd.

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