What's In A Credit Score?
Tuesday Jan 22nd, 2019
What’s in a Credit Score?
Let’s explore ways to create new financial habits and increase your credit score. We want you to be in tip-top shape financially which means establishing and maintaining good credit, regularly contributing to a savings account or investment account and topping up your RRSP’s and RESP’s.
Credit score insight: Canadian credit scores are calculated by two major credit bureaus: Equifax and TransUnion. Factors that are used to calculate your credit scores are your payment history, how much debt you have and how long you have been using credit. It’s a great idea to check your credit score occasionally and you can do so with both bureaus by mail. If you would prefer online, Credit Karma is a great place to start.
What does my credit score mean according to Credit Karma?
· 800 to 900: Congratulations! You have excellent credit. Keep reaching for the stars!
· 720 to 799: You have very good credit! You should expect to have a variety of credit choices, so continue your healthy financial habits.
· 650 to 719: This is considered good to lenders. You may not qualify for the lowest interest rates available but keep your credit history strong to help build your credit health.
· 600 to 649: This is fair credit. History of debt repayment will be important to demonstrate your solid sense of financial responsibility.
Simple ways to Increase Your Credit Score:
- Always pay your bills on time
- Keep your balances low
- Maintain a credit utilization ratio of less than 30 percent
- Tackle your debt
- Avoid using your credit cards to pay for large purchases
Good Financial Habits to Cultivate Now:
- Check your credit report (click on any of the links above to get started).
- Set up automatic payments for your bills or regular payments.
- If you’re young or have a short credit history, avoid opening several new accounts at once.
- It’s never too late to repair your credit so start with little steps today!
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