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There’s a new way to check your credit score for free, but is that smart to do?

Credit may not be the answer to all life's problems, but you can smartly manage it.

Canadian fintech startup Borrowell has opened up another avenue for Canadians to check their credit score, setting aside the usual $24 fee and offering a free credit check via a partnership with consumer credit tracker Equifax Canada.

“In talking to consumers everyday, we came to realize that many Canadians don’t know their current credit score, or how to improve it,” said Andrew Graham, the CEO of Borrowell in a statement. “By providing Canadians with their scores and educational resources on how to improve them, Canadians will have better options when it comes to accessing credit.”

As part of the free service, Borrowell will keep users updated at quarterly intervals on their credit scores.

The partnership is in step with fellow online lender Mogo’s offer of a free credit check for signing up and neither require any immediate obligations. Granted, once you sign up they’ve got your personal information so there’s that trade off. But you’ve got to hand it to them, the ease of signing up in order to access your credit score does away with a system many Canadians are mystified by.

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According to a survey conducted by BMO last May, more than half of Canadians have never checked their credit score while only 14 per cent check it yearly. Further to that, 31 per cent don’t know how to fix credit.

Laurie Campbell, CEO of credit counselling non-profit Credit Canada Debt Solutions, says there’s no shortage of myths and misnomers surrounding how credit scores are collected and how to improve them.

Many Canadians, for instance, don’t know the difference between a soft check and a hard check with one fifth of those surveyed by BMO saying that checking their own score will impact it.

In cases like these, both Mogo and Borrowell insist the credit check won’t effect your score, calling it a “soft check” – what the credit reporting world calls it when an individual checks their own score or businesses take a peek in order to offer you goods and services. It’s a contrast to a “hard check” where financial institutions or businesses examine your creditworthiness – a process that could have a greater impact on your score the shorter your credit history and the more frequently these kinds of checks are performed.

“Any time you have a creditor doing it, it shows as an inquiry,” says Campbell. “If you have multiple inquiries, what it tells a potential creditor is you’re fishing around for credit and it may make them nervous and they may not give you credit.”

A good credit score is generally considered in the range of 680 to 720 but the country’s biggest credit reporting institutions – TransUnion and Equifax – have their own criteria. Instead, Campbell posits a golden rule when it comes to repairing and maintaining good credit: less is more.

“People have this crazy thought that they need a bunch of credit with good repayment history to make them look good and that is not really true,” says Campbell. She points out that, in some cases, an overabundance of credit vessels in the repertoire could send the message that despite your pristine payment history, you could potentially bury yourself in debt with all those open credit lines.

“Less is more, you need one good solid credit card, good payment history and if you have a cellphone or something, that will work in your favour but you don’t need a multitude of different types of credit,” she says.

As for checking, while she points out that once a year is fine to check for any misplaced payments or fraudulent activity, the real key to maintaining a solid score is developing good habits.

“Keep your life simple, don’t have so much open credit that you don’t know who you’ve paid and when you pay them, pay them on time,” she says pointing that in an age of online banking it’s never been easier to keep on top of payments. “A lot of people think ‘oh well, I’ll just double up next month, it’s not a big deal’ but if you show a repeated pattern of doing that, it is a big deal – there really isn’t an excuse for missing payments.”