What’s Your Credit Score Number?

(TORONTO, ON) – When it comes to financial health, a credit score is one of the most important numbers a consumer has. This elusive three-digit number determines credit worthiness, and influences how much one pays for many of life’s needs. Yet, many consumers don’t know their score, or how it’s measured.

“Credit scores are viewed almost every time an individual applies for a loan or credit, tries to rent an apartment or purchase a car, and in some cases applies for a job,” says Jeffrey Schwartz, executive director of Consolidated Credit Counseling Services of Canada, Inc. “We depend on credit for so many important things in our lives, which is why it’s essential for consumers to know their score and what goes into calculating this number.”

Consolidated Credit recommends Canadians make a habit of reviewing their credit reports and credit scores annually, and at least six weeks prior to making a major purchase.

“Reviewing credit reports on a regular basis gives consumers the opportunity to examine their credit history and check for accuracy. It also puts an individual in a better position to maintain or improve their credit scores,” adds Schwartz.

In order to improve credit scores, it’s important for consumers to not only know their credit score, but to also understand the five factors that determine this number.

What Goes Into a Credit Score?

    1. Payment History (35% of credit score)Payment history tracks whether an individual makes his or her payments on time. Late payments typically lower credit scores.


    1. Use of Available Credit (30% of credit score)Carrying too much debt or continually using a large percentage of available credit can negatively impact credit scores. Regularly using more than 35% of available credit indicates a higher risk borrower and can lower credit scores.


    1. Account History (15% of credit score)A longer credit history will increase a credit score. Lenders typically look at how loans have been paid off in the past and how long an individual has been using and paying off an account.


    1. Recent Inquiries (10% of credit score)Opening or applying for several different credit accounts in a short period of time may represent a risk to creditors and lower an individual’s credit scores. Applying for a loan at a number of different places shows that a person is having trouble getting credit and may not be financially stable.


  1. Types of Credit (10% of credit score)Credit scores take into account a mix of all the credit cards, retail accounts, instalment loans and finance accounts in an individual’s name. While it is not necessary to have one of each, creditors want to know that an individual can handle more than just a credit card.

Ways to maintain or boost a credit score:

  • Always pay bills in full and on time
  • Avoid going over the credit limit on credit cards, lines of credit and retail accounts.
  • Keep balances well below the limits.
  • Reduce number of credit applications made.
  • Build credit history.

For more information on credit reports and credit scores, check out Consolidated Credit’s free information booklet, All About Credit and learn more about fixing your credit score.

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