Your credit rating affects all aspects of your financial activities when it comes to borrowing money. Your credit rating also has the ability to affect the job you get, the apartment you rent, and even the ability to open a bank account.
What Is A Credit Report?
A credit report is simply a listing of all of your mortgage and consumer debt. Here in Canada, the two main credit reporting agencies are Trans Union and Equifax. Both agencies have a credit history file on anyone who has ever borrowed money. When you borrow money or make a payment on a loan or credit card, the lender reports the information to these two agencies. In addition to credit information, you will also find liens and judgments on your credit report as well as your address and possibly your work history. The accumulation of all of this information is called your credit report.
Information on your credit report varies based on your creditors and what they have reported about you. Potential lenders and others, such as employers, view your credit history as a reflection of your character. Whether we like it or not, our financial habits reflect the way in which we choose to live our lives.
What is A Good Credit Score?
A credit score, or beacon score, is a number that gives mortgage lenders an idea of your lending risk. Credit scores range from 300 to 900, the higher your credit score the better. 670 is having good credit, whereas Canadians scoring 740 and over can boast of having a great credit score. The mortgage products and interest rates that you will qualify for are often determined by your credit score.
One thing that many people do not know is that you have the legal right to obtain a copy of your credit report. A mortgage professional can help you obtain a copy and go through it with you to verify that all of the information is true and correct. The good news is that your credit report is a working document. This means that you have the ability over time, to repair any damaged credit and increase your credit score.