You probable know that having a good credit rating is fundamental to getting low mortgage rates and credit card interest rates. But what exactly constitutes a great score? That’s in which the credit rating stages come in. Credit score ranges let consumers know how different credit score rankings stack up and which ratings qualify as exact or excellent, bad or average.
What is Credit Score?
A credit score is a number that specifies your perceived credit-worthiness in the eyes of credit rating companies, banks, and others. If you have a history of paying all your monthly bills on time and in full and you’re only using a small percentage of the credit available to you, you should have a high credit score. When you experienced missed bills, bankruptcy, defaults, collections or other negative credit events then your score will be lower.
There are two credit reporting agencies in Canada Equifax and Transunion. The basis for your credit score is your credit history. This includes but not limited to your line of credits, credit cards, loans, payment history, credit card and loan inquiries and or mortgage applications. Improve your credit score by paying your bills on time and avoiding late payments
What are the components of a credit score? Payment history makes up 35% of the credit score. A further 30% is based on the debt you’re carrying and the credit available to you. The length of your credit history makes up 15% of your credit score. In addition, 10% stems from whether or not you have any new lines of credit. This is because new credit is viewed unfavorably by credit bureaus, who tend to be suspicious of customers who are taking on too much debt in a short time. Finally, 10% of the credit score stems from the type of credit you have.
What are the Credit Score Ranges?
According to Equifax, your credit scores are being calculated based on your credit report. Credit range between 300 to 900 that helps you create your credit worthiness. Your credit score includes your payment history; the amount of debt you have; and the length of your credit history.
Creditor or lenders uses the copy credit score to make a fair decision whether to take risk or not to borrower. Always remember that everyone’s credit situation are different there’s no such “magic number” to reach when it comes to receiving better loan rates and terms.
Generally, credit scores from 660 -724 are considered good. 724 to 759 are very good and 760 and up are excellent. Most lenders considered 660 and up as lower risk borrowers. Those with 660 maybe less qualified for a better loan terms. Those score who fall into P”poor credit” category(range below 560) are more likely to have difficulty getting a credit or loan terms.
Credit repairs in Canada
Having a bad credit, mortgages in Canada may be give you difficulty in terms of approval. Credit repairing companies like credit repair may help you enhance and fix your credit report. They make guide you along the way and gives you some advise to do debt settlement. Credit fixing Oshawa may also help you look for an alternative lenders for your mortgage loans.
Having a poor credit means applying for a loan is not easy. talk to a professional like us, we can help you and guide you along the way.