With many first-time buyers clamouring to get up on the property ladder these days, many people have turned their thoughts to wondering about their credit rating.
People are thinking back on those few credit card payments they were late in paying, or that loan repayment that bounced back when they didn’t have the money in their bank account that one time.
Do I have a credit rating?
Anybody in Canada who has ever borrowed money will have a credit rating. More than 21 million Canadians have credit reports. And most of us have no idea what’s in them.
What is my credit score and how do I find it out?
The information in your credit rating generates a credit score which is used by financial institutions in making a decision on whether to lend to you. The first step to finding out your credit score is to check your credit report by contacting a credit bureau agency— our lenders typically use either Equifax Canada or TransUnion Canada.
The free reports won’t contain your score, but they will contain notes and details about the factors that make up your score.
What is a good and bad credit score?
The best score in Canada is 900, the worst is 300. If you have scores between 800 and 900, you’re in excellent shape.
Who can ask to see my credit rating?
Lenders and financial institutions can ask to see the information at the credit bureau as they use it in deciding if they want to lend to you or not. It is widely used and often cited by lenders when refusing to make loans.
I have a poor credit rating. Will this stop me from borrowing again?
For borrowers in difficulty, the first option to start repairing your credit history is to restructure problem loans. This doesn’t remove previously missed payments but it does stop the problem and starts the process of repairing and improving your credit score.
How do I get a solid credit rating?
- Check your credit report
- Pay down all your debt
- Maintain a low outstanding balance on your credit card
- Don’t miss a loan repayment
- Pay down your car loan (or better yet avoid car loans altogether
- Make regular savings payments
- Make a steady stream of rent payments (of a similar amount to a mortgage)
- Pay your bills on time
We have also developed a quick credit repair guide with tips and suggested tools to help repair your credit if needed. If you would like us to review your debt repayment options and a course of action to take, please let us know. We are happy to help!
