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Discussion Starter #1
Currently have unsecured LOC at CIBC (had for about 11 years) with $25,500 limit and prime + 3.5%. I've been basically using it as a free chequing account and overdraft. What is a good rate?

What's the potential of increasing the credit limit and/or asking for a better rate? What would the process typically be? I don't really want to go through a whole application process/proof of employment or whatever, but if it could automatically qualify like how my credit cards offer increases each year or so would be nice.
 

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^ Not sure if you have seen earlier threads in regards to LOC rates ... they're all over the map so the "good" rate may be elusive. Ie. it depends on your credit-worthiness. And if you have a grade A+ on that, I think a "fair" rate would be just prime.

As for your next question(s) - why don't just make a request on those (better rate based on current limit and then an increase to your credit limit) from your banking rep. (aka your assigned financial advisor). You might be surprised that you can get a better rate on a higher credit limit. The worst would be your banking rep. saying "no to either" and you can then take your business elsewhere (ie try another competing bank.)
 

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Discussion Starter #5
Why would you use a LOC as a chequing account? I don't see any benefit to this method.
No fees, free cheques, free overdraft (except interest), no minimum balance, at big 5 bank (not something like Simplii)
 

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A word of caution re LOC's. About 12 years ago we took out an LOC at the time we purchased our current house thinking it might come in handy for planned renovations. The renovations were never done but we kept the LOC thinking it was a nice safety net (despite also working on building up our TFSA safety net).

Well, I am embarrassed to admit this but I just renewed our home insurance and found out from my new agent (great firm by the way) if I dropped the $300K LOC I could save an additional $250 a year in policy cost!!! Needless to say I no longer have that LOC but I am still kicking myself for carrying for 12 years and the excess policy cost.
 

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^ So the insurance company was using your credit-worthiness as a factor in determining your premium/risk for insurance. Isn't that practice a no-no? At least that's what I understand for Ontario. Or maybe I'm behind the times.
 

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^ So the insurance company was using your credit-worthiness as a factor in determining your premium/risk for insurance. Isn't that practice a no-no? At least that's what I understand for Ontario. Or maybe I'm behind the times.
No, you get a “discount” on your home insurance if you declare yourself “mortgage free”. I think losses get a little more complicated if there is a full loss on a home with a mortgage on it.
 

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I think that you can agree to a credit check in the hopes it lowers your insurance. I do recall being Asked if I would consent to a check which may lead to lower prices.
 

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No, you get a “discount” on your home insurance if you declare yourself “mortgage free”. I think losses get a little more complicated if there is a full loss on a home with a mortgage on it.
... okay, I can see being 'mortgage-free' as being having less potential to self-flame your place. But using LOC + possibly credit card amounts as a factor to being more risky for property insurance?

So what happens if you have mortgage-insurance on the loan/mortgage (ie. still not mortgage-free) , do the discount still apply? I can guess not.
 

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... okay, I can see being 'mortgage-free' as being having less potential to self-flame your place. But using LOC + possibly credit card amounts as a factor to being more risky for property insurance?

So what happens if you have mortgage-insurance on the loan/mortgage (ie. still not mortgage-free) , do the discount still apply? I can guess not.
Are you speaking of credit protection? Ie. life insurance for the mortgage? No, this would not give you a discount.

and according to this site, credit scores can influence home insurance, but not car insurance in Ontario. Why insurers want a credit check for insurance quotes
 

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Are you speaking of credit protection? Ie. life insurance for the mortgage? No, this would not give you a discount.
... yes, life insurance on the mortgage. So basically the bank is protected and so what is the risk there for the property insurer other than the perceived notion that the loaner is not "mortgage-free", hence not qualified for the discount? Talk about double-(or triple depending on how you look at it)-dipping the customer.

and according to this site, credit scores can influence home insurance, but not car insurance in Ontario. Why insurers want a credit check for insurance quotes
... that's where I got my understanding that credit-scores are not used for auto-insurance so maybe also not on home insurance.

And then there's the flaw of doing (using credit scores) on home /property insurance based on above. Looks like a willy-nilly "risk assessment" factor/practice from the insurer (property) ... followed from the US.
 

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They will argue that people with higher credit scores are a lower risk, I would assume there is some actuarial science behind it.

on a similar note, I recall reading a study that seemed to prove that people who manage their cell phone batteries well, have lower credit risk, those who allow their phones to run down to 0% are a higher credit history.
 

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on a similar note, I recall reading a study that seemed to prove that people who manage their cell phone batteries well, have lower credit risk, those who allow their phones to run down to 0% are a higher credit history.
I guess that managing one's battery situation well is an indication of general organization & planning abilities.

I think there would also be a correlation between credit risk and expired food in the fridge. My hypothesis is that people who routinely "find" expired* food in the fridge are a higher credit risk.


* caveat is that it doesn't count if it's deliberate, since some foods can safely be consumed past their expiry date and the person might be factoring this in. So to be meaningful I think it would have to be the surprise presence of expired food. As in: "oh damnit, I didn't know this milk was expired"
 
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