What are credit scores and credit reports?

When you sign up for a credit card, the card issuer will consult your credit file and examine your credit "score", which is representative of your current financial situation. The latter is also known as credit rating or credit score. Two institutions (credit bureaus) will provide this information: Equifax and TransUnion. Once you've opened an account with one of the two credit bureaus, you'll be able to consult your credit file and your credit rating, which ranges from 300 to 900. A credit history will compile information such as : Your current types of credit (mortgage on house, car, etc.) Your employment history Your debts and credit history (late payments, NSF cheques, accounts transferred to a collection agency, judgments, bankruptcies, etc.) It's important to know that a credit card application will only account for 10% of your credit rating. In conclusion, credit card issuers want to know: whether you're a good or bad customer if you have debts whether other financial institutions have (successfully) authorized credit for you

How is the credit score calculated in Canada?

35% of your credit score comes from your ability to pay your balances on time. 30% of your credit score comes from your monthly use of your various lines of credit with different lenders (mortgage, line of credit, credit cards, etc.). 15% of your credit score comes from your credit history in Canada for all your lines of credit (credit cards, mortgage, car loan, student loans, etc.). 10% of your credit score comes from diversifying your types of credit (mortgage, line of credit, credit cards, etc.). 10% of your credit score comes from new credit applications (credit cards, car loans, personal loans, etc.).

What's the right credit score?

Two organizations establish credit scores in Canada: TransUnion and Equifax. You can open an account with any of them to obtain your credit file and credit score. However, this will differ from institution to institution. The scale used to assess your TransUnion score is as follows: 300-599 Very low 600-699 Low 700-749 Fair 750-800 Good 801-900 Very Good The scale used to evaluate your Equifax score is as follows: 300-559 Low 560-659 Medium 660-724 Good 725-759 Very good 760-900 Excellent We therefore recommend that you always maintain a credit rating above 700.

Is 700 a good credit rating?

Yes, 700 is a good credit rating. In fact, at Milesopedia, we recommend that you always maintain a credit score above 700, in particular by using the tips explained in this comprehensive article: "How to improve your credit score?"

How can I find out my credit score?

To find out your credit score, you need to open an account with one of Canada's two credit bureaus: TransUnion and Equifax. To help you read and understand your credit file, you can consult the following guides: TransUnion Canada: How to read your TransUnion credit file? Equifax Canada: How to read your Equifax credit file?

How do you increase your credit rating by 100 points?

Every situation is unique. But, as a general rule, to increase your credit rating, you need to respect the criteria of punctuality, utilization ratio, diversification of credit types, etc. In particular, remember to meet your monthly payment deadlines and maintain a utilization ratio of less than 30% for all your lines of credit.

How do I check my credit file on Equifax or TransUnion?

TransUnion and Equifax are the two credit reporting agencies in Canada. To check your credit file with these two agencies, you need to open an account and consult your file. You'll find your credit file, credit history and credit rating.