Wondering how to check your credit score?
Confused on where and how to check your credit score?
When you’re trying to get credit, whether it is for a car loan, a mortgage, a credit card or almost any debt, your credit score is a major component of your application. As a consumer, whether you are working to restore your credit, build credit up for the first time or simply want to keep tabs on how your credit is doing, it’s a good idea to check your credit score every now and then.
Learning about your credit health and how to check your credit score should be part of your overall financial management plan.
Is your credit score low because you’ve struggled with debt payments? You’re not alone. Our trained credit counsellors help people just like you strategize on how to pay down debts effectively, build a household budget and work towards keeping your credit healthy. Call us at for more information at 1-844-402-3073.
Do you know how to check your credit score and get your credit report?
In Canada, there are two major credit reporting bureaus: Equifax and TransUnion. They hold access to your credit history. It’s important to make the distinction between your credit score and your credit report.
Your credit score is a mathematical calculation that helps lenders determine the level of risk they will take on when they lend you money. Your credit report takes a number of other factors into account, but displays much of the information from your credit history to determine how high or how low your credit score is.
When you apply for credit, your lender will access this information, so that’s one way to check your credit history and your credit score. It’s a good idea to be able to access it on your own, for the sake of safety and preserving your credit health.
How to check your credit score: To check your credit score, you can request free copies of your credit report through Equifax and TransUnion by mail. You can also check them online immediately for a fee. They both offer monthly credit reporting subscriptions for a fee as well. Your credit history shows your repayment history, the length of your credit history, types of debt taken out and how much total debt you have in relation to your debt limits. Although both credit bureaus display much of the same information, Equifax calls a credit report a “credit file disclosure”, whereas TransUnion refers to it as a “consumer disclosure”.
Similarly, you can order a copy of your credit score through both of these companies, but there is a fee charged. There are a number of companies that offer access to your credit score, but make sure you do your research before turning over any personal information. There are many “credit score” companies out there that are fraudulent.
What is considered a good score?
There is a range for your credit score to be considered healthy. Credit scores range from 300 on the low end to 900 on the high end. Typically, if you’re applying for credit, a lender will use 650 as a benchmark. If you fall below that level, you may be challenged to qualify for your desired credit product.
How is your credit score calculated?
Your credit score is calculated taking a number of factors into account, many of which are displayed on your credit report. Different reporting agencies assign slightly different weight to the factors that make up your credit score, but the break down is similar to this:
Credit repayment: The biggest factor in creating a healthy score is your track record with making payments on time. This can help lenders decide if you’re responsible with credit, good with budgeting and have the income to support your debt payments. This factor usually makes up about 35 per cent of your score, so you can see how critical it is to have timely payments in order to have a good credit score.
How much debt do you have?: Making up roughly 30 per cent of your credit score is the consideration of how much debt you hold. Not only does this factor into your debt-to-income ratio, which is going to determine whether or not you qualify for credit, it can also hurt or help your credit score. It’s also harmful if you’re maxed out. It’s advisable to keep your balances low in order to maintain a good credit score.
Do you have a long credit history? If lenders don’t have a history to assess your ability to repay debt, they don’t have enough information to assess the risk of lending to you.
Multiple inquiries of your credit report/score: It’s important to note that ordering a copy of your own credit score or credit report doesn’t bring your score down. Applying for multiple credit products at numerous lenders in a short period of time with multiple inquiries into your credit history will though, because it appears that you may have applied and been turned down for credit by a number of lenders.
Diversified credit: If you’ve demonstrated your ability to handle multiple types of debt, like credit cards and installment loans, this will increase your credit score.
Why does your credit score matter?
It can be helpful to know what your credit score is before you apply for a loan or other credit product. If you’re making a major purchase, like a car or a home, having a good credit score can help you negotiate better interest rates. If your score is lower, be prepared to pay higher interest.
Your credit score and fraud
Checking your credit score and credit report is good not only to gauge your financial health, but also to alert you to any fraudulent activity. If you’re a victim of fraud, you may not even know it until you apply for credit and get turned down.
The sooner you’re alerted to red flags on your credit, the sooner and more easily you can generally fix them.
How do I improve my credit score?
Understanding the weighting of how your credit score is calculated can help you figure out how to improve your credit score. For instance, you’re advised to concentrate on making payments on time always. You should also pay debt down to decrease your overall debt load and consider taking out various types of credit (i.e. loans and credit cards) within your budget as part of an overall strategy to improve your credit score.
Ready to enjoy debt freedom? Give us a call at 1-844-402-3073 to speak to a trained credit counsellor today!
This publication is designed to demystify the credit scoring process. Credit scores can change frequently as information is updated in credit reports. Lenders may use different credit scoring formulas that are customized for their loan products. Additionally, this booklet has been formatted as an animated online interactive module that includes participant testing.