How to Read Your Credit Bureau Report + MORE Nov 10th

It’s no secret that debt is becoming an ever-growing problem in Canada.
In September, Statistics Canada announced that the ratio of household debt to disposable income in households rose to 164.6% in the second quarter of this year. The stats may seem dire but with some careful planning and patience, debt is a hurdle that can be overcome.
Credit cards are usually the culprits of massive debt pile-ups, while other consumer loans and mortgages also contribute to Canadians’ debt-loads. It’s easy to fall behind on monthly payments associated with unsecured debt and fall prey to high interest rates taking the reins.
So, how do you tackle debt?
Use your funds wisely
First, determine how much you can actually contribute towards paying off what you owe in a month, says Debbie Gillis, of K3C Credit Counselling in Kingston, Ont. Prepare a budget to determine how much you need to spend each week on basics and how much you can spare for making debt payments.
“I don’t recommend you use all of [your extra money] to pay down your debt…

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For many of us, credit scores are one important number on a page of confusing text and alphanumeric codes, consulted annually — or less frequently — when applying for an apartment rental or mortgage. Credit reports can seem cryptic and hard for the average consumer to interpret. But reading them – and understanding them – are important to maintaining good credit.
According to Equifax Canada — one of two main credit-reporting agencies in Canada, along with TransUnion Canada — Canadians should be consulting their reports once a year and verifying that the information is accurate and up-to-date.
Here’s a quick-and-dirty guide to what your report contains and what it means:
Your Credit Bureau Report
Here’s what the first page of your credit bureau report generally looks like:

So, what do these codes mean?
Beacon Score: This score will directly impact the interest rate you qualify for on a loan. It’s created by an algorithm, and reflects your credit-worthiness, and the risk of delinquency you pose to a lender…

At today’s rates, it’s easy to consider mortgage debt “good debt.” What happens when rates rise to historical averages?

Play: How to manage debt     
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The single biggest mistake when trying to control and pay down debt is failing to eliminate the highest-interest debt first. You have to prioritize by two factors: the rate of interest being paid and whether or not it’s tax deductible. Credit-card debt for consumption purposes is the most pernicious because a) the interest rates are onerous at near 20% a year; and b) There’s no way to deduct the expense of this interest from your taxes.
Given this, the obvious conclusion is to pay off high-interest, non-deductible credit-card debt ahead of all other debts— ahead of student loans and ahead of mortgage debt, both of which usually involve much lower rates of interest.
The second biggest mistake is paying off non-tax-deductible debt ahead of valid tax-deductible debt. You may ask what debts ARE tax deductible? Well, if you are a business owner you may have a corporate credit card you use exclusively for valid business expenses that should therefore be deductible from business income: valid auto expenses, office supplies and equipment, various professional services and the like…