In the last post we talked about how the rate a client receives is generally based on how much of a risk they are to lend money to. Part of that risk analysis has to do with an individuals credit score.
Credit scores typically range from about 350 to 850. 850 represents a client who is extremely likely to pay back any loans they take out in full, a 350 score represents somebody who is highly likely to default on their loans. Most people fall into the high 600’s low 700’s range.
Your credit score is incredibly important in determining whether or not a lender will lend you money. It is based on your past credit history and is usually a pretty good predictor of a clients risk. To keep the score high you should only apply for credit when you need it, and make all of your monthly payments on time. If you don’t, it will take approximately seven year for your credit to recover.
To find out your credit score is simple, and should be done about once a year. Go to equifax.ca and request the Score Power Credit Report. It will cost you about $25, but will give you a pretty good indication of where you stand in the eyes of a lender.
