What is Your Credit Score?
Your credit score is a number within the range of 300-900, with 900 being the perfect score. Your score is calculated by mathematical formulas determined by your activities on loans, credit cards, and banking accounts; based on a point system. Your credit score never stays stagnant, as every activity will either earn points or deduct them.
Your credit score is seen as a measurement of risk when businesses consider your application for a loan or a credit card. The score also determines your interest rate and credit limit, the higher the credit score generally results in lower interest rates and higher credit limit. Please keep in mind that your credit score is not the only thing the lenders use to consider your loan, they will also look at your income, current and past occupation, and your personal assets.
The credit bureau is the agency that store and share your credit report/score. Equifax and TransUnion are the two main Canada’s credit agencies. Financial institutions, credit card companies, auto, and other retailer’s purchase credit reports to assist them in considering you for whatever you have applied for. Besides the listed sources that offer information to the bureau, collection agencies, public records with courthouses, and offices that overlook child support payment will also contribute to your report. Knowledge is power, educate yourself, and take control of your credit.