Credit Report and Score Basics: Part 2 of 4

Credit_report_infoPersonal Information: Name, Date of Birth, Current and previous addresses, Current and previous phone numbers, Social Insurance Number (SIN), Current and Previous Employers.

Credit History Information: Credit cards, lines of credit and loans, telecommunications accounts, negative banking Information, public records, debts sent to collection agencies, inquiries (from lenders and others who request your credit report), remarks (Consumer statements, fraud alerts, identity verification alerts)

How much $ you owe
-Whether you miss and make payments on time -Whether you go over your credit limit
-Mobile and internet accounts may be reported, even though they are not credit accounts
-Chequing and savings accounts that have been closed “for cause” because of money owing or fraud committed by the account holder, can also be included

Source: Understanding your credit report and score (Financial Consumer Agency of Canada)

http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/Understa-Comprend-10.aspx

What are the factors that go into a credit score?

Payment History – When bills paid, late/missed payments, debts not paid that were written off or sent to a collection agency, whether you have declared bankruptcy

Use of available credit – How much of your credit you use counts toward your credit score. When you use a large % of your available credit, lenders see you as a greater risk, even if you pay your balance in full on the due date.

Length of credit history The longer you keep open and use an account, the better it is for your score. Your credit score may be lower if you have credit accounts that are fairly new and/or you close a credit card account and transfer the balance to a new card.

Number of inquiries When lenders ask a credit reporting agency for your credit report, it is recorded as an inquiry = usually happens when you apply for credit.credit-score-part2

-The number of times you apply for more credit can have a negative effect on your credit rating. Each credit inquiry is recorded in your credit report. -Inquiries usually happen when: you apply for credit, want to rent or are being screened for a job

Types of credit – You may be at risk for a low score if you only have one type of credit product, such as a credit card. It’s ideal to have a mix of different types of credit such as a loan, line of credit, or even a second but different type of credit card, such as an account with a store.

Source: Understanding your credit report and credit score (Financial Consumer Agency of Canada)

http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/Understa-Comprend-10.aspx

How do I improve my credit score?

-Formulas used to calculate your credit score are the property of private companies and are not publicly available.

-You’ll never know how many points your score will go up or down based on the actions you take

-So: make your payments on time, if you cannot pay the full amount, pay the minimum; if you think you have trouble paying a bill, contact the lender and see if a special arrangement to pay the debt is possible/can be worked out.

Source: Understanding your credit report and score (Financial Consumer Agency of Canada)

http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/Understa-Comprend-13.aspx

-According to the Financial Consumer Agency of Canada, aim to use less than 35% of your available credit

-Why less than 35%? Your credit score is affected by how much of your available credit you actually use, not your credit limits by themselves. If you use a large % of your available credit, lenders will see you as a greater risk, even if you pay your balance in full by the due date.

Source: Understanding your credit report and score (Financial Consumer Agency of Canada)

http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/Understa-Comprend-11.aspx

-Consider keeping an older account open even if you no longer use it and especially if there is no annual fee. The longer you have an active account, assuming you pay promptly, the better your chances of getting a loan approval from a lender. -Limit the number of times you apply for credit in a short period of time. Only seek credit when you really need it.

Source: Understanding your credit report and credit score (Financial Consumer Agency of Canada)

http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/Understa-Comprend-12.aspx#types

Source: Credit Canada: How to Improve your Credit Score

https://creditcanada.com/how-to-improve-your-credit-score?gclid=CM_qvdni58UCFRCMaQodekwAKg

Source: Understanding your credit report and credit score (Financial Consumer Agency of Canada)

http://www.fcac-acfc.gc.ca/Eng/resources/publications/creditLoans/Pages/Understa-Comprend-13.aspx