Credit Score
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The credit score is also referred to as a FICO Score. It is a mathematical formula created by Fair Isaac and Company.
The credit score is used by most companies to see if you are a good credit risk or not. Scores range from 300 and 900, or possibly an R for Reject. A credit score of over 680 is considered excellent. A reject score is generally given if there is not enough reporting credit sources for the credit companies to be able to generate a score.
There are 2 major credit reporting companies in Canada:
1) Equifax
2) Trans Union
Calculating Credit Score
FACTOR |
WEIGHT |
POINTS |
| Payment History Bankruptcies, late payments, past due accounts and wage attachments collections, judgments |
35% |
315 |
| Amounts Owed Amount owed on accounts, proportion of balance to total credit limit |
30% |
270 |
| Length of Credit History Time since accounts opened, time since account activity |
15% |
135 |
| New Credit Number of recent inquiries, number of recently opened accounts |
10% |
90 |
| Types of Credit Number of various types of accounts (credit cards, retail cards, mortgage, line of credit, loans, etc.) |
10% |
90 |
| POTENTIAL TOTAL |
100% |
900 |
How to Improve Your Credit Score
- It is important to check up on your credit score regularly. Watching your score will help you see how your daily spending and payment habits can affect your score for the positive or negative.
Nowadays you check your scores in a few different ways:
1) a fair amount of the large banks now offer a free credit score - see if the bank you use offer this
2) you can order you own score from Equifax & Trans Union yourself
3) there are many free credit score companies available to sign up with. Below are a few.
- borrowell.ca
- creditkarma.ca
- mogo.ca
If you're looking for some great tips and tricks to get your credit score up take look at the attached below. For a PDF copy feel free to reach out to me and I would be happy to send you a copy of these details.
