What is a Credit Score?

A Credit Score is a statistically derived number that lenders use to indicate your credit worthiness. Your Credit Score will be listed on your Credit Bureau Report from Equifax and Transunion and be anywhere from 300 (Very Poor) to 900 (Very Good).

How is your Credit Score Factored?

Below are approximate percentages taken from “Equifax’s” Website:

  • 35% is based on your PAYMENT HISTORY. Are you making your payments on time? Are you making your minimum payments?
  • 30% is based on your AMOUNTS OWED. How much debt do you have? Are you at your limits and paying anything down?
  • 15% is based on the TYPES OF CREDIT. Do you have a lot of different type of accounts? Do you have several of these accounts?
  • 10-13% is based on NEW CREDIT. Do you have a lot of new accounts taken out? Do you have a lot of recent inquiries for apply for credit?
  • 5-7% is based on your LENGTH OF CREDIT HISTORY. How long have your accounts been opened for, how long has it been since you have used the accounts?

How to improve your Credit Score

  • Make your payments on time and repay the full balance owing each month if possible. If not pay at least the minimum payment on time or slightly more than the minimum payment.
  • Don’t use all your available credit so you are at your limits each month.
  • Keep old accounts active and follow the above two points.
  • Do not keeping applying for Credit if you have been declined for credit, too many inquires will bring down your score.
  • If you have many types of Credit, try to consolidate them into one payment or keeping only one or two credit cards.

If you are at the point of not being able to make your minimum payments or you have started missing payments or if your balances are not coming down at all due to the interest, our Debt Management Plan may be of assistance to you. You would only make one low monthly payment and the interest will be lowered at times to 0%. You may also fill in our online Budget Worksheet for a free assessment.

Learn how to check your credit score!

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  • info@debtfreecanada.ca
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