While your credit rating looks at your credit history, your credit score measures your financial health at a specific point in time. Credit agencies use a number of different factors to arrive at your credit score.
6 factors that determine your credit score
- Your payment history
- If you’ve ever declared bankruptcy
- How much money you owe
- How long you have had credit
- The type of credit you use
- If you’re trying to get more credit
The first 3 factors are the most important.
What your score means
Your credit score will be between 300 and 900. The higher your score, the more likely you are to get a loan. A higher credit score can also help get you a lower interest rate. But there’s no guarantee.
You may need a credit score of 750 to lease the car you want, but your landlord may be fine with 650. It’s up to each lender to decide.
Learn your credit score
There are two major credit reporting agencies in Canada – Equifax and TransUnion. To learn your credit score, order a copy of your credit report from one or both of these agencies. It’s free, and these agencies don’t share information, so it’s a good idea to check both. You can choose to receive your credit report by mail or online.
Your report also contains information on:
- your loans, credit cards and other forms of debt,
- personal data like your name, social insurance number and date of birth,
- bank accounts and any NSF (bounced) cheques,
- your current and past employers, and
- a record of any debts you’ve had referred to a collection agency.
You must order a separate report to learn your
credit rating. This report is also free.