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carrick on money

I have a column planned on the most important numbers in assessing your financial health. Sneak preview: One of them will be your credit score.

Most people know their credit score determines whether they will be able to get a mortgage or a car loan, and at what interest rate. But property insurers may use these scores to set premiums, employers may consult them in assess job applicants and landlords may use them to select tenants.

Your credit score is your history of paying your debts, compressed into a single number. As you’ll see below, there are quite a few places where you can view your credit score at no cost.

But understanding your score is another matter. These numbers are based on complex algorithms that reward certain behaviours and penalize others. Whether your score is good, bad or indifferent, it’s often hard to understand the rationale behind the number.

Globe personal finance editor Roma Luciw and I aim to help you better understand your credit score in a Season Two episode of our Stress Test podcast, which covers personal finance for Gen Z and millennials. You can help us – e-mail your questions about credit scores to rluciw@globandmail.com. Or send us a recording of you asking the question. Simply open the voice memo app on your phone, record your question and e-mail the file to Roma.

We’ll pick a bunch of them and get an expert on credit scores to provide answers.

Here are some of the questions I want to ask:

  • Are the credit scores you can see for free from some financial websites the same ones that lenders, landlords and employers look at?
  • Which debts and bills are factored into your credit score, and which are not (student loans, for example)?
  • What’s the best thing a 20-something can do to build a strong credit score?
  • What’s the best way to quickly turn around a weak credit score?

Need to find out your credit score quickly? Here are some no-cost options:

  • Online banking: Banks and credit card issuers often provide free credit scores to clients via their websites or mobile apps.
  • Online lenders: Borrowell and Mogo will show you a credit report if you sign up. You do not have to borrow money from them to get the information.
  • Other options: The financial website Credit Karma offers free credit scores.

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Rob’s personal finance reading list

The Ford F-150 pickup and your retirement

An investment industry blogger wonders if our preference in vehicles is costing us money that would be better used in our retirement funds. He uses the F-150 pickup in the U.S. market as an example, but it applies equally well here.

Getting a raise? Here’s what to do with the money

What’s happening in the economy today does not auger well for pay increases. But let’s say you’re fortunate enough to get a raise. Answers here on how much of your extra pay you should spend on yourself and how much you should save. The point here is to avoid lifestyle creep, where your spending rises by the same amount as your raise.

The blue chip stock with the 8 per cent dividend yield

An investing newsletter takes a look at Enbridge Inc., a dividend-paying blue chip with a high dividend yield that really stands out in this era of low interest rates. High yields are a result of investors selling a stock (prices and yields move in opposite direction) and thus can be viewed as a sign of concern about a company.

Are women more financially fearful and risk averse?

The editor-in-chief of Golden Girl Finance says no: “It’s more likely girls and women have been actively discouraged from developing these skills so as not to disturb the status quo.” Read her well-argued call for women to “step up their financial power.”


Ask Rob

Q: We would like to know if there is more money going to pensioners during the second wave of coronavirus.

A: Nothing has been mentioned. Here’s a refresher on what the government offered seniors in the late spring. The payment was criticized at the time for including people who didn’t need the money.

Send us your money questions. Sorry we can’t answer every one personally. Questions and answers are edited for length and clarity.


Today’s financial tool

There’s a lot of speculation about whether inflation will be one of the lasting economic effects of the pandemic. Here’s a calculator that shows the long-term effect of inflation in Canada


The money-free zone

I caught this song on Spotify the other day and present it here as a nostalgic moment for my fellow late-gen baby boomers: Uncertain Smile by The The. A song I can picture myself grooving to on the Toronto radio station CFNY back in 1983. Probably on my Blaupunkt car stereo.


ICYMI

Here are some personal finance related Globe stories:

More Rob Carrick and money coverage

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Even more coverage from Rob Carrick: