Your credit score is more than just a number—it’s like a VIP pass to the best mortgage rates, the lowest interest on credit lines, and the coolest credit cards.
Having a good credit score is not enough; you’ve got to aim for a great one. The question arises: what’s the sweet spot? Anything 650 or higher is good, but shoot for 750 or more to be at the top. Don’t stress if your score is below; there are many ways to improve it. Credit utilization is the unsung hero in your credit score journey. We’ve ignored it in the money world, but no worries, we’re shining a light on it. It’s like your secret weapon to boost your credit score effortlessly.
What is a credit utilization ratio?
Your credit utilization ratio is a crucial financial metric that can raise or lower your credit score. It’s a simple calculation that reveals the percentage of your available credit that you’re using. The lower, the better. To compute, divide your credit card balances by your credit limits and multiply by 100. The result is your credit utilization ratio, and the goal is to keep it as low as possible.
Why does credit utilization ratio matter?
Lenders and credit bureaus see a low credit utilization ratio as a sign of financial responsibility. A high ratio signals potential risk, making you less appealing to those who hold the financial keys. If you want that credit score to shine, keep that credit utilization ratio in check. It’s a small metric with a mighty impact.
How do you determine your credit utilization ratio?
Figuring out your credit utilization ratio can be easy with a simple formula.
- Tally Up Your Balances: Add the outstanding balances on all your credit cards. This is the total amount of money you owe.
- Sum Up Your Credit Limits: Now, sum up the credit limits on all your credit cards. This is the total amount of credit at your disposal.
- Do the Math: Divide the total balances by the total credit limits, then multiply by 100 to get a percentage.
Credit Utilization Ratio = (Total Balances/Total Credit Limits) ×100
Here’s a quick example: You have two credit cards—Card A and Card B. Card A boasts a $1,500 credit limit and wears a $600 balance, while Card B has a $2,500 credit limit with a $400 balance. Add up those balances and tally up the credit limits.
Credit Utilization Ratio =()x100 = 25%
In this scenario, your credit utilization ratio stands at 25%. And anything below 30 percent is great. Keep that Ratio in check, and you’re on your way to mastering the credit game.
What is the impact of your credit utilization ratio on your credit scores?
Your credit utilization ratio is an important metric that influences your credit scores. Lenders use it as a litmus test. A lower ratio signals financial responsibility, whereas a higher one poses a risk. Keeping it below 30% is the sweet spot, proving you’re in control and trustworthy with credit. In the long term, a consistently low ratio builds a positive credit history and unlocks financial opportunities.
What are the strategies for keeping a healthy credit utilization ratio?
Your credit utilization ratio is a powerful player in the credit score game. Adopting these strategies, you maintain a good ratio and pave the way for a robust and impressive credit score.
- Request More Credit Power: Take charge of your credit game by asking for a higher credit limit. It’s not about spending more; it’s about reducing your credit utilization ratio by increasing the available credit. This move can instantly amplify your financial flexibility.
- Stay Alert, Stay Smart: Set up automatic alerts to keep you in the loop. Receive notifications when your balances approach risky territory and ensure you’re always aware and in control of your credit utilization.
- Double Down on Payments: Reduce your credit utilization by implementing a payment strategy that is twice as effective. Pay your bills twice a month instead of once. This approach keeps balances in check. It minimizes the impact on your credit utilization ratio.
- Think Twice Before Closing: Closing accounts might seem like a tidy solution, but beware. It can throw your credit utilization ratio out of balance. Be strategic and cautious about shutting down credit card accounts, especially the older ones, as they hold valuable credit history.
How to spot and prevent impersonation fraud
- Do not just bump into things: Introspect. Refrain from responding quickly: When the caller puts you under time constraints, hang up as well as contact the organization directly. Don’t give in to their intimidation tactics.
- Refrain from giving personal and financial details to suspicious callers.
- Never disclose any strange caller with your temporary access code, SIN number, PIN, debit/credit card number, or bank details. Your bank will never request such details from you.
- Disconnect or discontinue the call: Anyone reputable would never approach you unexpectedly and demand money or data. Please disconnect. It’s a hoax.
- Do not even rely on caller ID. Fraudsters understand how to fabricate caller IDs so that they appear to be from a genuine phone number.
- Avoid paying anybody who requests money using a gift card, wire transfer, or cryptocurrency. Only crooks urge you to pay in this manner.
- Don’t click on any attachments: In most circumstances, opening a phishing email or SMS is safe. The trick, though, is to avoid downloading any attachments. Ransomware, such as viruses, bugs, or spyware, may be included in attachments.
- Pay special diligence to the spellings of web URLs or websites that appear trustworthy but might be replicas of the online company you’re searching for.
- Use multi-factor authentication to safeguard your accounts. Several accounts provide additional protection by having two or more passwords to log in. This is referred to as multi-factor authentication.
In the past few years, cyber scammers have seriously stepped up their game. In today’s era, scammers have more and more ways and mean to gain access to our information. It’s happening to businesses, it’s happening to millions of consumers across Canada, and it happens every day. Cybercriminals are not only smart and cagy but are also very, very busy. Currently, 75 percent of scams are happening online and via text messages. And that texter can be just about anyone. They might be pretending to be your friend or boss or even pretending to be your local theatre company. Do not engage in unsolicited texts coz as soon as you respond, they know you are there, so you are an act of target. Always try to follow the prevention steps mentioned in the blog, and never hesitate to say no to something that you concisely doubt. Aside from the measures listed above, if you have any questions about mortgage financing, please contact our experienced team of professionals at Pegasus Mortgage Lending Center Inc. We will always be happy to assist you in locating the most appropriate lenders across Canada and USA for your home.33281679417081515
Impersonation scams refer to the illicit use of identifiable aspects of an individual, brand, or entity.
Defined, an imposter impersonates someone else to gain an illegal advantage. The impulse is commonly encountered in the theft of confidential data or the sale of counterfeit goods. Impersonation schemes defraud tens of thousands of individuals each year. Fraudsters utilize a false impression of legitimacy to take money or confidential material from individuals.
Criminals use a technique known as social engineering to manipulate and deceive you into transferring funds or disclosing personal and financial information. However, only individuals are not their target audience. Impersonators are also interested in business, and they’ve been recorded using the identities of government institutions and famous worldwide corporations to hide their illicit activities behind an appearance of authority.
Let us now look at the most widespread kinds of impersonation fraud
- Fake Mobile Applications: Pertains to programs that are designed to resemble the genuine application. Customers paying for the application and discovering nothing from downloading it are among the most typical scams associated with it. In another type of fraud, your phone is overloaded with hundreds of advertisements, and the scammer receives income from the commercials displayed on your phone. Finally, the most hazardous applications are the ones that include malware and viruses that allow fraudsters to access your phone’s sensitive data.
- Fake Social Media Accounts: You may have come across impostor or puppet accounts on social media networks. These fraudulent accounts impersonate celebs, influencers, corporations, or even ordinary people. Facebook just took measures on 1.6 billion bogus accounts in the first half of 2022. Such accounts are highly dangerous since fraudsters swindle the followers of the original page.
- Phishing Emails: Phishing emails and SMS frequently present a tale in an attempt to persuade you to click on a link or open an attachment. You may get an unsolicited email or text message which appears to be from an organization you recognize or acknowledge, such as a bank, credit card, or utility provider. It might also be from an online payment website or app. While legitimate businesses may contact you via email, they will not send you an email or text with a link to the updation of payment details.
- Typo-Squatting: Fraudsters develop bogus websites that appear and seem just like your desired website, so you don’t know you’ve arrived somewhere else. These sites may exist to offer goods and services which compete with those sold on the original website you meant to visit, but they’re most typically designed to acquire your personally identifying information, such as credit card credentials. After AnnualCreditReport.com was founded, for example, hundreds of identical domain names with deliberate errors were acquired, which soon hosted false websites meant to deceive customers.
- Cyber-squatting: The term applies to the unlawful registrations and usage of Internet domain names which are alike or identical to trademarks, corporate names, or personal names. When the internet first became popular, some unethical people filed the names of well-known corporations as domain names to sell the domains back to the firms once they awoke. However, possibilities for cybersquatters are fast dwindling as most firms have now recognized the need to secure domain names.
- Ransomware: A sort of malware which blocks users from obtaining important data and then demands payment in exchange for access to be restored. Ransomware is generally distributed through phishing attempts. Mostly ransomware is distributed as attachments in spam emails, downloaded from malicious URLs via mal-advertisements, or dumped onto unprotected systems via exploit kits.
How to spot and prevent impersonation fraud
- Do not just bump into things: Introspect. Refrain from responding quickly: When the caller puts you under time constraints, hang up as well as contact the organization directly. Don’t give in to their intimidation tactics.
- Refrain from giving personal and financial details to suspicious callers.
- Never disclose any strange caller with your temporary access code, SIN number, PIN, debit/credit card number, or bank details. Your bank will never request such details from you.
- Disconnect or discontinue the call: Anyone reputable would never approach you unexpectedly and demand money or data. Please disconnect. It’s a hoax.
- Do not even rely on caller ID. Fraudsters understand how to fabricate caller IDs so that they appear to be from a genuine phone number.
- Avoid paying anybody who requests money using a gift card, wire transfer, or cryptocurrency. Only crooks urge you to pay in this manner.
- Don’t click on any attachments: In most circumstances, opening a phishing email or SMS is safe. The trick, though, is to avoid downloading any attachments. Ransomware, such as viruses, bugs, or spyware, may be included in attachments.
- Pay special diligence to the spellings of web URLs or websites that appear trustworthy but might be replicas of the online company you’re searching for.
- Use multi-factor authentication to safeguard your accounts. Several accounts provide additional protection by having two or more passwords to log in. This is referred to as multi-factor authentication.
The Bottom Line
In the past few years, cyber scammers have seriously stepped up their game. In today’s era, scammers have more and more ways and mean to gain access to our information. It’s happening to businesses, it’s happening to millions of consumers across Canada, and it happens every day. Cybercriminals are not only smart and cagy but are also very, very busy. Currently, 75 percent of scams are happening online and via text messages. And that texter can be just about anyone. They might be pretending to be your friend or boss or even pretending to be your local theatre company. Do not engage in unsolicited texts coz as soon as you respond, they know you are there, so you are an act of target. Always try to follow the prevention steps mentioned in the blog, and never hesitate to say no to something that you concisely doubt. Aside from the measures listed above, if you have any questions about mortgage financing, please contact our experienced team of professionals at Pegasus Mortgage Lending Center Inc. We will always be happy to assist you in locating the most appropriate lenders across Canada and USA for your home.
