Learn How to Maintain Creditability
Most Canadian lenders are using either Equifax credit report or TransUnion credit report. Both are using Credit Score method to determine the consumer general characteristics described in the credit report include credit performance, current level of indebtedness, need for new credit, types of credit, and length of time that credit has been in use. The score is a statistical measure indicating the probability of delinquency with a higher score representing lower risk.
Formulae underlying scoring models are very complex. Following is a general estimate of factors that impact credit score;
| ** Payment history |
35% |
| ** Credit owed |
30% |
| ** Length of time credit has been in use |
15% |
| ** Types of credit facilities available (i.e. installment loans, revolving loans, etc.) |
10% |
| ** Number of recent inquires |
10% |
It should be noted that it takes at least six months of activity on your file before a credit score is registered.
Thus it’s obvious that the single most important way to generate a good credit rating is to pay your bills on time!!! Additionally, keeping low balances on each credit facility also helps improve your credit score.
Most importantly No one care about your credit worthiness than you do.
|
