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How to build and maintain your credit history

Your students know the importance of working hard to get good grades.

The higher their grades, the better their chances will be at securing their post-secondary institution of choice.

The same basic principle applies to building and maintaining your credit history. The higher your credit score, the better your credit history—and the greater your chances at securing the loans you need for large purchases such as a new home or vehicle.

In order to build and maintain your ‘good grades’ when it comes to your overall credit history, there are three keys steps you can take.

Step 1: Review and understand your credit score.

You can obtain/review your credit score for free online through the Equifax website.

To better understand how the scoring system works, think of your credit score as your final grade on the subject of your personal finances. Except instead of an A+ or B-, your credit score consists of three digits between 300 and 900.

Here is how the scoring system works:







300 – 559



560 – 659



660 – 724



725 – 759














Very Good



Step 2: Always strive for the best credit rating.

Different from your credit score, each account (i.e. every credit card, loan, etc.) listed on your credit report will be assigned a ‘rating’. The rating is a single number between 0 and 9 and reflects the current payment status of each account (and here’s a hint: you’ll always want to strive to be number 1—literally).

Here is what each of those ratings mean:






 0  Account exists, but there’s been no recent activity (in order to be rated)
 1 Account is paid/up to date (this is the rating you always want to have)
2 to 5 Not considered ‘bad debt’ yet, however account payment is overdue (rating will increase from 2 to 5 depending on how long overdue)
 6 to 7 Payments are being made through a third-party program
 8 Repossession or foreclosure of collateral
 9 Bad debt—account is now in collections

Step 3: Keep good habits when it comes to your credit.

Always doing their homework, studying for tests—these are the basic rules of thumb that your students need to follow to maintain good grades. When it comes to keeping your credit score high and your credit history problem-free, the same basic principle (of maintain positive habits) applies.

  1. Always make the minimum down payment: While it’s ideal to pay the entire balance off every month (as having credit with a zero balance can help you maintain a higher credit score), sometimes it isn’t financially feasible. Ensuring you at least make the minimum monthly payment on each of your accounts will keep your credit rating in the number 1 position—which will have a positive ripple effect on your credit score and overall credit history.
  2. Don’t be late (or skip out) on making payments: This tip is self-explanatory. Repeatedly being late on your payments will reflect poorly on your credit report and bring down your overall credit score.
  3. Don’t max out your credit limit: Remember, just because you have a $5,000 limit—doesn’t mean you have to charge that amount to your card. Maxing out your card(s) will affect your credit score and not in a good way (stay under 75% of your available credit to maintain the highest credit score).
  4. Review your credit report once a year: An annual review of your credit history will ensure that your credit score and ratings accurately reflect all of the information in your report. If you spot any errors or false claims, you can immediately take the steps to resolve these by filing a ‘Dispute Resolution’ through TransUnion or Equifax.
  5. Protect your credit information: Identity thieves continue to look for resourceful ways to get hold of your credit information—particularly online. To prevent this from happening, be sure to always keep your passwords and PINs secure by never sharing them with anyone, or by leaving that information where someone could easily find them. If you’re accessing accounts and personal emails/information on a mobile device or public computer, be sure to use the ‘private’ browser function (which does not keep a log of viewed/accessed web pages) and always clear the browser history. It’s also a good idea to change your passwords and PINs every 6 months.
  6. Don’t let your credit accounts fall into collections: Any accounts that fall into collections will remain on your credit report for a period of 7 years from the date of the last activity. This may prevent you from being able to obtain any further type of credit or loan during this timeframe.

Have no credit or bad credit? There are steps you can take to build or rebuild your credit score.

When you’re just starting out in life, or recovering from bad credit (or even a bankruptcy), it can feel like the road ahead towards building/rebuilding your credit is long, winding, and uncertain. But remember, just as the ancient Chinese philosopher Laozi so eloquently stated, “A journey of a thousand miles begins with a single step.”

  1. Apply for a secured or pre-paid credit card: These types of cards can be used in the same way as a regular credit card, except the credit limit is set by how much money you can put down (for example if you put down $500 on it, your credit limit would be $500). These cards are easier to obtain because the lender isn’t taking any risks. Plus any activity on a secured card is reported the same as it would be with an unsecured card, so if you handle a secured card responsibly, you may eventually become eligible for an unsecured card.
  2. Open a regular or high-interest savings account: Showing that you can save money may prove to a lender that they can trust you with smaller limits to begin with on credit cards or lines of credit.
  3. Get an overdraft allowance on your bank account: An overdraft is kind of like a credit card or loan in training. Think of it as extra money when you need it that then gets paid back as soon as you make a deposit. While it shouldn’t be used excessively, using your overdraft occasionally shows that you can be trusted to pay back what you owe.
  4. Repay an account that has gone into collections: If you have an account that has gone into collections and it becomes possible to start repayment, you should do so. This will show that you are serious about rebuilding your credit score.

Have questions when it comes to your credit history? Reach out to Educators Financial Group.

No matter where you are on the pay grid, or what your pension income is in retirement, we can provide you with borrowing solutions that work with your established credit history—all while meeting your specific needs, goals, and budget.

Have one of our accredited Mortgage Agent Level 1 get in touch with you.

Increase your financial literacy by watching our on-demand credit webinar or bringing our credit workshop to your classroom:

The Ever Changing World of Credit for Educators: When it comes to this subject, ignorance definitely isn’t bliss. So from the good and the bad, to the downright scary — In this webinar, available to watch anytime, we delve deep into everything you need to know about credit as part of the education community.

Credit Score 101 Lunch and Learn for Educators: In this 30-minute session delivered by an Educators Financial Group financial specialist, we’ll bring the food and the food for thought when it comes to understanding, protecting, and maintaining your credit score.

Financial Literacy Workshop for Students: In this interactive 30- to 60-minute workshop delivered right in your classroom by an Educators financial specialist, students will learn the importance of building a solid credit rating so they can better manage their finances.

To schedule a credit workshop for your school, call us at 1.800.365.9541 or click here.

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