Credit Score Tips & Advice Canada - Top Things You Need to Know About Your Credit Score. http://www.mymoneycoach.ca | http://www.nomoredebts.org
Credit Video5: Learn which of your credit behaviours can either increase or decrease your score! Also, learn why being fixated on knowing your credit score all the time may not be as important as you think.
For more information on your credit ratings and credit report please see our other videos by visiting: http://www.mymoneycoach.ca.
If you’d like to book a free and confidential appointment with one of our credit counsellors please call us at 1-888-527-8999 or visit us at http://www.nomoredebts.org.
In this video we will touch upon how credit score models work:
Credit scores can range from: 400 650 609 700 720 800 816 850 848 all the way to 900, (or low to highest / perfect). There are many ways to raise / increase, fix or rebuild your credit score. Things like not making payments on time, not making the minimum payment or bankruptcy can affect your score points. If you have a low score you will need to make improvements to boost it.
Your credit score is a measure that lenders use to predict how likely you are to pay back your debts. If you would like a mortgage, a house or a new car, lenders will look at your credit score to determine if you are a risk, and how much before or if they choose to lend money to you. The higher the number the more likely you are to pay back what you owe. You may need to improve or raise the points in one or more areas (sometimes fast doesn’t work and rebuilding or increasing credit is a gradual, steady process) that lenders pay attention to which you can find below.
Quick info about Your credit score is made up and calculated - Five factors on how a credit score works:
1.Your payment history makes up 35%
2.How much debt you owe makes up 30%
3.The length of your credit history makes up 15%
4.10 % comes from the types of credit you have and;
5.How often you apply for new credit has a 10% impact
Let’s break this down a bit further:
The biggest chunk is your payment history; this looks at whether or not you are making your payments on time and if you have any debts in collections.
How much debt you owe takes into account how much debt is owed and how much credit is still available to you.
The length of credit history looks at how long you’ve had your credit products for. The longer you’ve had a credit product, the better it is for your credit score.
Types of credit will look at the variety of credit products you have
And, new credit is how often you apply for credit. New credit applications will stay on your credit report for 3 years. New applications are also known as a “hard hit” which can negatively impact your score. “Soft hits”, like checking your own credit report won’t negatively impact your credit score.
You might be thinking to yourself: do I need to check my credit score monthly? You don’t! Your credit score changes throughout the month based on those five factors we just talked about. So your credit score can look different from month to month and if you’re practicing good credit behavior in the areas of payment history, amount owed, length of credit history, types of credit and new credit, your credit score will reflect that!
What you need to check annually is your credit report because if you have an accurate credit report, you will also have an accurate credit score. Take a look at how to check your credit report for free in our other videos!
And if you really want to check your credit score, the best time to do that would be before you make a large purchase, like a home or a vehicle to make sure everything looks good. You may wish to check your credit score every 6 months though.
To pay for and to get your credit score go to http://www.equifax.ca and http://www.transunion.ca.
Videos were created by the Education Department at the Credit Counselling Society – if you want to learn more about our team and would be interested in having financial literacy workshops at your workplace/organization please contact us: http://www.nomoredebts.org/credit-counselling-society/consumer-services/credit-budgeting-workshops.html. Learn secrets, hacks, tricks, tips and get awesome advice!
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