The E.J. Klassen Motorcade team.

Understand Your Credit – What is reporting?

Series explores what credit is and how you can manage it

The credit report is a very technical document in pure form. Deciphering it is a challenge. Thankfully today there are dozens of applications and websites that you can use to track your score and who is looking at your credit. Without endorsing any particular site or app, using one of them will help fortify you and your credit!

On the report there are three categories of credit: R, I, and O.

Revolving – Credit cards and lines of credit are examples of revolving credit

Installment – This is a fixed-payment, fixed-term loan. If you make the payments on time for a set period the loan ends. Car loans are great examples of this.

Open – This category is mostly used for utilities that report to the bureau. Cell phones are the most common.

The import thing to recognize is that you want to ensure that none of your credit ever gets to a period of being late more than 30 days. At 30 days you now have a mark on your report. This is not to say you can wait 29 days and all will be well. Making payments on time is critical. Lenders track timeliness of payments so if you want to use this lender again it is best to be on time.

Making payments on time requires you to also keep in mind the time it takes for the money to get to the creditor. Mailing a cheque, you must allow for transport time and processing. A standard rule of thumb is 10 days. Online payments are faster. The usual timeline is 3 to 5 business days. Paying the creditor directly usually results in an immediate update of the payment. Regardless of which method you use, keep track of the date and time of the payments and if you are talking to people over the phone, write down the name and any ID numbers that they can provide. Having this log will help fix any mishaps should a payment not get reported properly.

As the only remaining locally owned and family run dealership in Port Hardy, we at E.J. Klassen Motorcade want to help our community to continue to grow and improve. We want to help you fortify your credit against future dilemmas.

Remember, this is your credit, your money and your future. There are no silly questions. Read contracts, read pamphlets. Ask questions, ask for clarification if you do not understand something. Credit is potentially a long-term commitment; knowing what you are signing up for is important.

Feel free to come by anytime and we would be happy to look at your situation and see what we can do.

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