The Well

Rachel Surman | Blog

Credit Monitoring And Good Credit Go Together Like PB +J

November 3, 2018

Monitoring your credit score and having good credit is kind of like enjoying a delicious peanut butter and jam sandwich. Peanut butter packs a whole lot of goodness into just a tiny little spoonful and the same goes for checking your credit score! Monitoring your credit score can lead to some delicious benefits.

In fact, in a new study from Borrowell, there was a well-established correlation between credit monitoring and credit score improvement, but it also found a positive relationship between monitoring your credit score and better credit behaviour in general.

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Back to our sandwich, good credit is essentially the jam that comes along with monitoring your credit score. This is really exciting news for us at Borrowell because we want to help Canadians make great decisions about credit by giving them the tools they need to improve it. Because having a good credit score (like jam) is pretty sweet.

You’ll want to read all the study details on the positive relationship between monitoring your credit score and having good credit.

Why you can’t have one without the other

Borrowell members receive their free Equifax credit score and credit report on a monthly basis. To measure member engagement, we calculated the percent of logins upon credit score refresh for each member. Then, we calculated the difference between a member’s first score when they signed up for Borrowell and their most recent score. We found that our most engaged members increased their credit score by an average of 18 points, but also that there’s a correlation between credit monitoring and a positive change in credit behaviour.

We found that members who check their credit score frequently have lower:

  • Delinquency rates and late payments
  • Rates of collections
  • Credit utilization

What does this mean?

Lower delinquency rates and late payments

Did you know that payment history (paying bills on time) makes up 35% of your credit score? This is why it’s so important to make on-time payments! We found that a higher frequency of credit monitoring was related to lower rates of delinquencies and late payments over time, which can help build a good credit score. 

Lower rates of collections

Similarly, credit monitoring was also related to lower rates of collections. Collections and bankruptcies can severely affect your credit score – so try to avoid these items if you can. 

Lower credit utilization 

Credit utilization makes up 30% of your credit score, so it’s something you need to pay attention to! Credit utilization is the amount of credit you’ve used out of the total amount that’s available to you. Banks and lenders like to see this utilization rate below 30%. According to the study, members who improved their credit scores over time have learned to manage their utilization ratio as well.

Did you know that you can check your credit score for free with Borrowell?  It’s the first step in understanding your credit report and improving your credit score. Regularly monitoring your credit score has some delicious, good credit benefits.

Get your free credit score now!

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