21 Jan

Bank of Canada lowers target rate to 3/4%


Posted by: Rita Wagner

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 3/4 per cent. The Bank Rate is correspondingly 1 per cent and the deposit rate is 1/2 per cent.

“This decision is in response to the recent sharp drop in oil prices, which will be negative for growth and underlying inflation in Canada.”

Although there is considerable uncertainty around the outlook, the Bank is projecting real GDP growth will slow to about 1 1/2 per cent and the output gap to widen in the first half of 2015. The negative impact of lower oil prices will gradually be mitigated by a stronger U.S. economy, a weaker Canadian dollar, and the Bank’s monetary policy response. The Bank expects Canada’s economy to gradually strengthen in the second half of this year, with real GDP growth averaging 2.1 per cent in 2015 and 2.4 per cent in 2016. The economy is expected to return to full capacity around the end of 2016, a little later than was expected in October.

There has been no change to the Bank of Canada rate since September 2010 until the move today.

2015 has started off with quite a bit of speculation as to what rates would do throughout the year.  Just a couple of weeks ago, the media were reporting that we could expect to see rates going up due to the broad recover of the US economy.

However, most recently Morgan Stanley was quoted in the National Post as saying “Don’t look for another interest rate hike for two more years; in fact, there is a one in three chance the Bank of Canada will actually cut rates before the end of this year”.

The next scheduled Bank of Canada date for announcing the overnight rate target is March 4, 2015.

7 Jan

Top Factors that Make Your Credit Score Lower


Posted by: Rita Wagner

At this time of year, especially if we were extra generous with our gift giving, it’s important to review the top factors that can lower our credit scores. Please also see “Tips to Improve Your Credit Rating” below.        


1. There are too many consumer finance company accounts on your credit report. Having too much available revolving credit can hurt your score. If you have several consumer accounts try to consolidate those balances and close the accounts. Keep the oldest account active, if possible.

2. Your account balances are too high. As a rule of thumb keep your credit card balances below 35% of the available limit. High balances ongoing will negatively affect your credit score.

3. There is not enough recent revolving account information on your credit report. Using your credit cards regularly is an important part of building healthy credit.

4. There have been multiple lending institutions pulling credit reports on you. This is part of the
advantage of using a Mortgage Broker; we pull one credit report and then go to several lenders
vs. having several lenders each pulling your credit bureau.


1. Always pay your bills on time. (The payment of utility bills such as phone, cable and electricity are not recorded in your credit report, however many cell phone companies report late payments.)

2. Pay Debts as quickly as possible. (It is still important to have active trade credit reporting).

3. Try to pay your full balance off on all cards every month whenever possible.

4. Don’t go over the credit limit on your credit cards or leave outstanding balances at or near limit for too many consecutive months in a row.

5. Don’t make too many credit applications (use a Mortgage broker). Your score doesn’t change if you personally make credit inquiries.

6. Contact creditors if you’re having trouble making payments and work out solutions. The earlier you do it, the better.

7. Read the statements you receive from your credit card company carefully. Keep yourself up-to-date with any changes or fee increases.

8. Keep your credit usage to no more than two credit cards and one Line Of Credit. Avoid store credit cards.

9. Get a copy of your credit report from all three credit-reporting agencies at least once a year and make sure they’re in order.