Elevate Your Credit: Unlock Your Future With The Chexy Credit Builder

Just starting out your credit building journey? Looking to improve your credit so that you can get a car or a dream home? Well, you've come to the right place. It's time to turn those dreams into reality with the Chexy. Let's dive into how Chexy's Credit Builder can make a difference in your credit journey, opening doors to a better mortgage, car loan rates and everything in between.

Building Credit and Your Credit Score

In Canada, your credit score isn't just a number—it's a key factor that impacts nearly every aspect of your financial life. From securing a mortgage to renting an apartment to financing a car, your credit score more or less is the determining factor in your eligibility for loans, credit cards, and other financial products.

Building and more importantly maintaining good credit is essential for achieving long-term financial stability and unlocking financial opportunities.

Before we go any further, let run over the basics:

What Makes Up Your Credit Score?

Your credit score is calculated based on several factors, with the top 3 making most of the impact:

• Payment History (35%): Your payment history is the most significant factor affecting your credit score. It tracks whether you've paid your bills on time. Late payments, defaults, and bankruptcies can all have a negative impact on your score

• Credit Utilization (30%): This is the ratio of your credit card balances to your credit limits. It's essential to keep this ratio low, ideally below 30%, to maintain a healthy credit score.

• Length of Credit History (15%): This factor considers how long you've had credit accounts open. Generally, a longer credit history the better.

With Chexy’s Credit Builder, you can take control of your credit score by ensuring on-time rent payments, thereby improving your payment history and further extending the length of your credit history. More on this below.

What is Considered a Good Credit Score?

The elusive credit score — often referred to, rarely talked about and barely understood! So, what exactly is a good credit score?

Generally, credit scores range anywhere from 300 to 900 in Canada, with higher scores indicating better creditworthiness — this is where were want to shoot for the stars!

A good credit score in Canada is usually considered to be 650 or higher. Canadians should aim for a credit score above 720, which is considered to be “great” and can get you access to the best rates and offers.

Why Your Credit Score Matters

Your credit score is a reflection of your creditworthiness and financial responsibility. Lenders, landlords, and even potential employers may use your credit score to assess your reliability and trustworthiness.

Here are a few reasons why your credit score matters:

1. Access to Credit: A good credit score opens doors to better credit card offers, loans, and lines of credit.

2. Renting and Housing: Many landlords and property management companies in Canada conduct credit checks as part of the rental application process. A strong credit score can increase your chances of being approved for rental housing and may even help you negotiate lower security deposits or even rent payments!

3. Homeownership: For many Canadians, buying a home is one of the most significant financial purchases you’ll ever make. Lenders use your credit score to assess your mortgage application and determine the interest rate you'll pay. A higher credit score can help you qualify for better mortgage rates, potentially saving you thousands of dollars over the life of your loan (more on this below).

The Struggle For Canadian Renters

For Canadians, particularly renters, many of whom are young adults and even new to the country, building credit can be challenging. These renters typically have only one credit card, a phone bill and students loans resulting in thin credit files. This leads to a lack substantial credit history, a hurdle the Chexy Credit Builder is here to solve.

So, What Exactly Does A Thin Credit File Mean?

A thin credit file refers to a credit report that has limited information, which for many Canadian renters who do not have a long history of building their credit score or are just starting out, is what their credit report might be labelled as.

And as explained above, without a good credit score and credit history, you’ll be putting yourself at a disadvantage when trying to obtain loan terms for big-ticket purchases like homes or vehicles.

Traditional credit reporting methods have overlooked rent payments, leaving renters with limited opportunities to build credit and expand their financial horizons …. until now.

Chexy’s Credit Builder: An Opportunity to Grow

Enter us, Chexy, your partner in credit building. By reporting your rent payments to Equifax, one of Canada’s major credit bureaus, we fill the gap in your credit history, helping you create a solid foundation for future financial goals.

This not only reassures lenders, property managers, and landlords of your reliability but also allows you to leverage your largest monthly expense, which up until now has gone unnoticed in improving your financial standing.

Moreover, as you consistently make on-time payments through Chexy, your credit history steadily grows. This is impactful because, as explained above, payment history constitutes 35% of your credit score, while the length of your credit history accounts for 15%. By regularly reporting your rent payments to Equifax, Chexy effectively extends the length of your credit history, ultimately contributing to a higher credit score.

Priceless Value: How Chexy Translates into Real Savings

Now, let's talk numbers. Imagine you're applying for a mortgage or car loan with a thin credit file. Lenders may view you as a higher risk, resulting in less favorable interest rates and loan terms. However, if you report your rent payments with Chexy, you would have a better credit history, which would demonstrate responsible financial behaviour.

Real Life Mortgage Savings: A Case Study

Consider this scenario:

Two individuals apply for a mortgage, both with similar financial backgrounds but differing credit histories. The first individual has a thin credit file, while the second individual has been using Chexy to report rent payments for the past year. As a result, the second individual boasts a higher credit score, qualifying for a lower interest rate on their mortgage.

The second individual, with the better credit score, succeeds in securing a mortgage rate 0.5% lower than the other individual on their 5 year mortgage. Over this term, they ultimately save more than $12,000 simply by having a better credit score

With Chexy by your side, you could potentially save tens of thousands of dollars over the term of your mortgage, all thanks to the power of rent reporting.

Set Yourself Up For Success and Start Now

Don't let thin credit lines hold you back from achieving your financial goals. With our Credit Builder, you can turn your rental payments into a powerful credit-building tool, paving the way for better mortgage, car loan rates and more.

Heres how to get started:

From the Tenant's Perspective:

Upon activating your Chexy account:

1. Add Credit Builder to Your Account: After activating your account, navigate to the "credit builder" tab on the left hand side.

2. Confirm Your Information: You'll need to verify your rental and landlord details for security purposes.

3. Invite Your Landlord: Once you confirm your information, we'll send a Plaid verification link to your landlord, requesting their confirmation and asking them to onboard.

From the Landlord's Perspective:

Upon receiving the Plaid verification link:

1. Confirm Ownership: Your landlord must confirm their ownership status of the property.

2. Verify Identity: After confirming, they'll be directed to a secure Plaid page for identity verification. This process involves facial scanning and submitting a photo ID for confirmation.

Once your landlord onboards, your rent payments will start being reported to Equifax! And just like that, you’ll go from money down the drain to building a brighter future for your goals.

Say goodbye to financial limitations and hello to a brighter credit future with Chexy.