Humber College student Zane Hamilton plans on buying a car one day.
But the first-year cosmetic management student says she doesn’t know if she has a good enough credit rating to be able to get a set of wheels.
“I can’t imagine it would be very good, to be honest,” she said. “I’m just like bad at paying on time so I don’t know if that affects your credit but I’m always late in paying or I either don’t have enough or something like that.”
Hamilton said she wishes she learned more about credit ratings because she doesn’t know how to check her status.
“Honestly I don’t think there is enough information out there because I don’t even really know like what…determines bad credit,” Hamilton said. “If people talked about it more you would probably be able to know what it is.”
And she’s not alone. According to a 2015 report by BMO financial group, 56 per cent of Canadians have never checked their credit score.
They also found that more than one-third of Millennials, people aged between 18 and 34, don’t know how to attain a good credit score.
Richard Kingston, a business management professor at Humber College, says the issue is less about students checking their score than maintaining a high one.
“They can check it like once to make sure that their score is adequate and maybe once a year after that maybe just to make sure nothing strange has happened,” he said.
Kingston said making late payments can make for a very bad credit score.
“The most important thing for anybody including students is to not be late with any payments – or worse than that, default on any payments,” he said. “In fact, that gives you a very bad credit rating and it’ll follow you for the rest of your life. It’s very difficult to change a credit rating once it’s in there.”
There are a few things people can do to check out their credit status.
Online personal loan company Borrowell is offering free credit score checks.
The company’s CEO Andrew Graham said its offering this service to help Canadians understand where they stand financially while promoting the business.
“We’ve found that there’s a lot of people who don’t know what their credit score is and it’s one of those numbers that’s both really important but not widely known, because it’s been hard to get in Canada traditionally. So we made a deal with Equifax to be able to offer your credit score for free,” Graham said.
A credit score can determine whether people get loans approved for a car rental property, or mortgage.
Sometimes it can even determine whether they get hired for jobs.
“If you want to work in the financial services, many companies will check your credit,” Graham said. “They want to know that you’ve got a history of being responsible with money and that you’re not in way over your head.
“It also matters if you want to rent an apartment. The landlord will ask for a credit score or your credit history so I think it’s really important to know,” he said.
“Having a weak credit score can mean it’s hard to do that or it’s more expensive to do that,” Graham said.
For Hamilton, she says she’s not sure if she will end up checking her credit score anytime soon but she adds that knowing her score would be beneficial to her in the future.
“Money is like the last thing you want to worry about,” she said.