Advisors have a role to play in counseling their clients on the factors and behaviour that can contribute to a good credit score, according to Tony Tintinalli, regional vice president for Bank of Montreal (BMO) in Toronto.

This support is especially useful since a recent BMO report finds that almost one-third of Canadians lack knowledge on how to achieve a good credit rating. More than half, at 52%, do not know what would be considered a good credit score and 21% of respondents believe the number to be below 600.

“A good credit score is generally considered in the range of 680 [to] 720,” says Tintinalli.

The results come from a survey conducted by Pollara Strategic Insights between Jan. 12 and Jan. 15. It used a random sample of 1200 adult Canadians, with 1077 of those respondents having at least one credit card.

The survey also found that 56% of Canadians have never checked their credit score while only 14% check at least once a year. One-fifth of the respondents believe that checking their score will actually decrease it.

Share these four tips with your clients and help them build or maintain a good credit rating:

1. Pay bills on time
Canadians should submit payments by bill deadlines or become as current as possible with past-due bills. If a payment is missed, the individual should call his or her credit card or mortgage company to work out a plan that will prevent unnecessary hits to the credit score.

Try talking to your client about setting up automatic bill payments if it’s suitable for the bill in question, which will help clients stay on track.

2. Closing accounts won’t always help the credit rating
Advisors can set their clients straight on the myth that closing old accounts will increase their credit score. This is not necessarily true. Credit bureaus look at a combination of factors, including the total length of the credit history. This means it may be better for clients to keep their credit cards but manage them responsibly, according to BMO.

3. Check credit reports
Clients should also be encouraged to seek their credit reports, which can be ordered free of charge from three major credit reporting bureaus: Equifax, Experian and TransUnion.

4. Stay informed
Canadians can check the Financial Consumer Agency of Canada for more information on understanding and improving their credit rating.