Your credit score is determined by these factors*:
- Your payment history (do you pay your credit cards on time? Do you miss your debt payments?)
- Bankruptcy (have you declared bankruptcy in the last 7 years? Has a collection agency had to collect unpaid bills from you?)
- Account history (how long have you had credit?)
- Inquiries made about your credit report (how often do people ask about your credit report?)
- Type of credit you are using (do you carry high balance on your credit cards and/or lines of credits)
Each factor is weighted differently. The most important factors are your payment history, bankruptcy and the amount of your outstanding credit balances.
It's a good idea to order a copy of your credit report before you apply for a loan (so you know what your score is beforehand). As a rule of thumb, you should review your credit report at least once per year to ensure the accuracy of the information that has been collected.
Equifax Consumer homepage
TransUnion consumer homepage
Is your credit in need of repair?
Credit Counselling Canada is an association of non-profit credit counselling agencies across Canada that offer services to help you during financial difficulties. Professional counsellors work with you (on a confidential basis) to review your financial situation, explore your options, help you resolve debt problems and learn how to use money and credit wisely. They will also help you develop a realistic budget to manage your expenses. Click here to find a community-based member agency near you.