What Is A Credit Score?
There are two major companies in Canada that report consumer credit, Equifax and Trans Union, more commonly known as the Credit Bureau. Both provide a credit history not unlike a report card we would have received in school. It is important to understand that a credit score (FICO Score) is a mathematical algorithm based on:
- the length of time the consumer’s file has been open with the credit reporting company
- frequency and type of credit enquiries
- repayment history and utilization percentage of credit
All weighted accordingly and input into the algorithm to create an overall credit score.
Keep in mind lenders will take into account the applicant’s overall score but will also review individual trade lines to identify both positive and negative trends and behaviors when making a credit decision.
High credit card or line of credit debt, frequent inquiries, missed loan payments (especially those related to auto finance) will have a negative impact on a consumer’s credit score as well as increasing the risk factor of the application when reviewed by a lender.
If you have any further questions you can visit us in person at any of our Crown Auto Dealerships, call us at 1-877-346-8082 or visit us online at www.crowncredit.ca and click the FREE CREDIT EVALUATION link.