Understanding Your Credit

Canada Motor Car, Used Car Dealership, Ontario

Understanding Your Credit, Canada Motor Car

Credit has become one of the most important things in our day to day life. Our credit report is in a way like a financial report card. All the finance companies we deal with on a daily basis such as the credit card companies, banks, lenders and store credit cards all report to the credit bureau on a monthly basis.

Here are a few of the things that will help better your credit. Be on time with your payments. Never miss a payment- even if you only pay the minimum amount that is ok. The important thing is to pay it. Try to pay credit cards in full as often as possible. Keep your accounts open, even if you are no longer using that particular credit card. Longevity is an important factor when it comes to good credit. The longer an account is open, the better your score will be. Having said that, it is all these factors put together that play a role in having a good credit score. Information on your credit report can stay on there for up to ten years. Unfortunately, not all of us have the best credit. There are two major credit bureau companies that operate in Canada, Equifax and Trans Union. They score your credit according to their formulas to develop what is known as a Beacon Score. Beacon Scores usually range from 400 to 850; 400 being lowest score and 850 being the highest score. These credit ratings or Beacon Scores estimate the ability and willingness of a person to repay a debt or loan.

Repairing credit will take time and patience on your part. Having no credit is almost as bad as having bad credit. Most lenders do not approve people that have no credit history. This is because they do not want to take the risk. The good news is that you do not have bad credit. You just have to develop your credit.

Bad credit takes more time and effort to repair. The first step in repairing your credit is to get a credit report on yourself. Once you obtain your credit report make sure the information on the report is in fact correct, such as your personal information, your payment history and the list of all your creditors.

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