What is your Credit Score, and why you should know about your Credit Score

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What is your Credit Score

What is your credit score you ask? At Trusterra Mortgage we do our best to share information that we feel would be educational and helpful to consumers in Canada. A credit score effect’s everyone and is very important that everyone knows what it is, how it works, and why is it so important.

The following excerpts are from the Financial Consumer Agency of Canada’s publication titled “Understanding Your Credit Report and Credit Score”. We highly recommend you read the publication in its entirety at the Financial Consumer Agency of Canada’s web site.

What is a credit report?

– Along with the credit histories of millions of other people, your credit history is recorded in files maintained by at least one of Canada’s three major credit-reporting agencies: Equifax, TransUnion and Northern Credit Bureaus. These files are called credit reports.

– A credit report is a “snapshot” of your credit history. It is one of the main tools lenders use to decide whether or not to give you credit.

Who can see your credit report?

– You have the right to see your credit report. No one else can have access to the information in your report unless you allow it.

– Usually, when you sign documents such as a loan or a credit card application, you are allowing the organization that is giving you credit to check your credit history. Credit-reporting agencies will only give information from your credit report to someone else when you have given permission, and when the request is related to credit, collection of a debt, rental of a house or an apartment, or an application for employment or insurance.

What is a credit score and what is your credit score?

– Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.

– There are many different ways to work out credit scores. The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender.

– Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay.

The next important thing about what is your credit score is that one should do is to go online to Equifax.ca or TransUnion.ca to check his or her credit information to make sure that the personal and credit information that is on there is correct, as well to see what the credit score / strength is. you should check with both credit bureaus because one could have the correct information but the other may not. We have had cases where our client’s information was not updated or erroneous and they had problems when trying to get a mortgage because of it. If you do notice any discrepancies they can be corrected. Doing this check is vital today than ever before due to the increase in identity theft and fraud.

There is a cost to doing an online check, about $23 for Equifax, and about $22 for TransUnion. Money well spent! The good thing is that when you pull your own credit report it does not affect the rating. Every time you go to a Bank or loan company or apply for a credit card, a credit check is done on you. Every time a credit check is performed it affects your credit score which if done too many times is not good, and can lower your credit score. This is why you need to be careful not to have too many credit checks done at too short an interval, and another reason why it’s better to go through a trusted mortgage professional such as Trusterra Mortgage when looking for a mortgage.

Here are the links:

Equifax credit report (click on “See My Credit Score”)

TransUnion credit report (unclick the “analysis” option, but select the “personal credit score” option as well $7.95)

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4 thoughts on “What is your Credit Score, and why you should know about your Credit Score

  • August 13, 2012 at 9:38 am
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    Thank you for recommending our publication!

    Note that it’s a good idea to request a copy of your credit report at least once a year. And if you make your request in writing and send it by mail, it’s free: http://bit.ly/yJYnRS

    @FCACan

    • October 16, 2012 at 10:58 pm
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      I am a mortgage unirrwedter and PMI is for conentional loans only. FHA loans have MIP. This is not new. No, mortgage insurance is not required on a conventional loan when 20% is down. If less than 20% PMI is required. The 3% loan he speaks of is now 3.5% now in todays market is an FHA loan. Most folks that do not speak on that type of loan is not approved to do FHA loans. Not too many companies do 2nd liens any more. The lender is the best loan to do because the fees are less.

  • August 25, 2012 at 5:25 am
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    • October 16, 2012 at 7:51 am
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      Take a look around you. Everyone you know is broke. Broke is naorml. Broke is playing the credit score game. Your only 19 straight out of high school and these guys have already given you three credit cards. Go talk to everyone you know and ask them has having a credit card really brought joy into their lives. Sure they are great at the mall but when payment time comes and late fees and over the limit fees and collections come around how great are those cards then. Ask them how would it feel to be out of debt today. How would having that bill lifted off their shoulders feel to them? How would not having to deal with payments and credit scores and fees feel? I gaurantee that no one will say that all the hassle is worth the convenience. They will rationalize with air miles and small cash back bonuses, but is all that really worth being subject to credit. Now is the perfect time to start being weird and actually have some money. Cut up those cards and close those accounts. Start your life in freedom not in slavery to the credit card companies and your credit score. If your score is already 708 and you can’t get a loan then that shows you that the almighty credit score is not so almighty. Unlike the credit card company the loan office is using it’s head. Here is a person just out of high school. Probably doesn’t have a great income. There is a lot of risk there, better get someone else on the loan in case they can’t pay. Not the credit card company. Hey here is someone with a name let’s give them a card.

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