<img height="1" width="1" src="https://www.facebook.com/tr?id=397411463962201&amp;ev=PageView &amp;noscript=1">

Your Credit Rating

Learn what a credit rating is, how it's determined, and how to find out yours.

Become Debt FREE

Request a free, confidential, personal consultation to get information on ALL of your options to become debt FREE.

 

What is Your Credit Rating?

credit-rating-report.jpgYour credit rating is actually another term used to refer to your credit score. Your credit score is a number, based on specific information on your credit report. Your credit score is used by lenders to predict the likelihood that you will repay future debt. Your credit score changes frequently and it is up to each lender how they interpret and use your credit score.

Your credit score has nothing to do with your income, occupation, or where you live. Your credit score does not have access to this information - and even if it did, these factors are not part of the algorithm that determines your credit score. Someone with a small income who manages their money and credit well can have a fantastic credit score in the same way that someone with a huge income can have a horrible credit score if they don't pay their bills on time.

What is a Credit Report?

A credit report is a summary of how you pay your financial obligations. It contains information based on what you have done in the past. Lenders use it to verify information about you, see your borrowing activity and find out about your repayment history. Some of the information on your credit report is used to determine your credit score.

What Does Your Credit Rating Mean?

Your credit rating - or credit score - is a number which can range from a low near 300 to a high of 850 or 900 (depending on which company is calculating the score).


If someone’s score is 580, it means that “580 people out of 850 are likely to repay their debt.” If someone’s score is 780, it means that “780 people out of 850 are likely to repay their debt.”

The number represents the odds that a lender will get the money back that they lend someone. The higher the number, the better the odds.

5 Key Factors in Calculating and Determining Your Credit Score

 credit-score-chart.jpgYour credit score is primarily determined by 5 important factors:

  1. Your Payment History (this usually makes up 35% of your score)
  2. How Much You Owe (30% of your score)
  3. The Length of Your Credit History (15% of your score)
  4. Applying for New Credit (10% of your score)
  5. Types of Credit You're Using (10% of your score)

Find out more about these factors and how they work.

How to Try and Get Your Credit Score

If you would like to find out your credit score, here's how you can try to get it:

  1. To get your real, actual credit score, you'll need a lender such as your bank or credit union to "pull" it and let you know what it is. Not all lenders will do this, but some will. You just need to ask. The best time to do this is when you're applying for credit or opening a bank account. When they pull your credit score, this will count as a "hard hit" on your credit report, but don't worry, it usually takes at least several enquiries like this per year to begin to slightly impact your score.
  2. To get an estimate of your credit score, you can pay either of the credit reporting companies, Equifax or TransUnion, or you can get a company such as Credit Karma to give your credit score to your for free (they pay for it but make money by getting you to agree to allow them and other companies to advertise to you). We don't endorse any of these options, we're just letting you know what they are. Your credit score with Equifax and TransUnion should be similar, but can differ a little as it's possible that some financial insitutions may report to one credit bureau and not the other. Please also be aware that the score you get from any of these place is not your actual credit score. It's only an estimate generated by a different algorithm - not the real credit score generating algorithm that banks and credit unions have access to.
  3. You can also get a free estimate of your credit score by trying this credit score estimator tool. It seems to do a fairly good job - and it's free! What's also nice about it is you can try playing with information and seeing how different scenarios can impact your score.

How to Get Your Credit Report

You are entitled to have a free copy of your credit report mailed to you once a year. You can also pay for an instant copy too. You can find out how both these options work here. It is important to have a look at your credit report every once in a while to make sure that there are no inaccuracies and that no one has applied for credit in your name without your permission.

How to Get Help to Improve Your Credit Rating

counsellor-helping-with-debt.jpgNormally, the best things you can do to improve your credit rating are to manage your money wisely using a realistic spending plan and deal with your debts. If you need help with either of these things, you can make a free appointment to speak with one of our Credit Counsellors either in person or over the phone. They can help you go over your situation, put together a budget, look at all your options, and then put together a plan to help you get your finances and credit back on track as soon as possible. Appointments with our Counsellors are always free, completely confidential, and non-judgmental. We’re simply here to help you. Give us a call at 1-855-232-4888.

 

Get help button

Accredited member of Credit Counselling Canada.
International affiliate of the National Foundation for Credit Counseling.
Accredited as a charity with the Better Business Bureau.
Winner of the Consumer Choice Award in cities across Canada.

Get a free consultation button