Finance with Pall

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Pall, a woman in a suit is drawn pointing at a graphic that reads “Finance with Pall”
Finance? More like Fun-ance! Allister White

Making financial news make sense 

Welcome to the Carillon’s “Finance with Pall,” a news finance column covering important economic and financial news from Canada and around the world, focusing on explaining what that news means for students. From tuition costs to job markets, we’ll break down how these changes affect you, making finance easy to understand and relevant to your life. If you have any request for a topic or want me to highlight a stock price – shoot me an email at pall@carillonregina.com. 

Disclaimer: The information in this column is intended for educational purposes and is not financial advice. For personalized financial guidance, please consult a licensed professional.

Terms of the week: 

Credit score: “Credit score” is a term you may hear frequently when going to the bank, applying for loans, or discussing credit cards. 

A credit score is a three-digit number that represents your creditworthiness, meaning it reflects how likely you are to repay the borrowed money. It helps lenders like banks or credit card companies better understand the risk of lending you that money that you are seeking to borrow. 

The higher your score, the more likely you are to get approved for loans or credit, and the better your chances are at getting lower interest rates. In Canada, financial institutions, credit card companies, phone companies, employers, and landlords are just some of the people who can use your credit report to view your credit score. 

According to the federal government’s Financial Consumer Agency, Saskatchewan is one of three provinces where consent is not required to check a credit report. In other provinces, written consent is required

Credit utilization: This is a percentage of your available credit that you’re currently using, which helps lenders assess how responsible you are with managing your money. For example, if your credit limit is $1,000 and you’ve used $300, your credit utilization is 30 per cent. 

According to Equifax, keeping credit utilization as low as 30 per cent shows that you’re not overextending yourself financially, which can help maintain a good credit score. Why is this relevant? Keeping a healthy credit utilization rate reinforces a good credit score which at the end reflects your financial health and how you deal with paying back debt. 

News of the week

You might have heard about interest rate cuts recently. Let’s explore what is new in the past month and discover what the experts have to say about October, especially whether or not they say there’ll be any further rate cuts. 

According to Katherine Judge, an economist at the Canadian Imperial Bank of Commerce, “For the Bank of Canada’s October announcement, the upcoming employment report will be key in determining whether a 25-basis-point or 50-basis-point cut is necessary, with today’s data not enough to sway us from our 25-basis-point call at this point.”

What does this mean? Judge is suggesting that the Bank of Canada’s decision in October about lowering interest rates will depend on the upcoming employment report.

This report will help the government decide if they should lower rates by 0.25 per cent (25 basis points) or 0.50 per cent (50 basis points). However, based on the data they have right now, they still think a smaller cut of 0.25 per cent is more likely. 

This means that as interest rates would be lower, borrowers would be more willing to borrow money, incentivizing businesses to borrow money for expansion and hiring workers. Lower interest rates could give businesses greater access to capital investments, leading to economic growth and the possibility for potentially lower unemployment numbers.  

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