Credit Rating

    Credit Rating

    In Canada, credit scores range from 300 up to 900 points (the highest. It seems that 650 is the magic middle number.  If you have a score above 650 it will likely qualify you for a standard loan yet a score under 650 will likely make it difficult to receive a new loan.

    There are 2 agencies in Canada, Equifax and TransUnion, that you can order your credit report from.  You should do this at least once per year.  You can do this for free when you request the report by mail, fax, and telephone or in person.   You can pay to see your credit score if you choose as an alternate option.

    The way your credit score is calculated is considered proprietary and you will see very little information regarding it.  The reporting agencies do list the main factors that affect your credit score.

    Payment History – Pay your bills on time.  A good record of payments being on-time will help boost your score.

    Delinquencies – Any delinquent payments will drop your credit score.  Depending on length, number of accounts and how recent affects your score.

    Balance to Limit ratio – Things like maxing out your credit card.  Keeping balance around 30% of your available credit is the best way to go.

    Recent Inquiries – every inquiry can affect your score.  So be careful to only apply for credit you really need.

    Length/history of accounts – An established credit history makes you a less risky borrower and earns you more points.

    Variety of Credit Accounts – A healthy credit profile has a mix of credit products (IE: car loan, credit card, line of credit, etc…) will earn you more points on your file.

    Too many accounts – Having too many credit accounts is another warning sign of financial issues.

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