Tuesday 18 June 2013

What qualifies as a good credit score?

Your credit score is becoming more and more important when it comes to applying for a mortgage, so staying informed about your report and its contents is key. The major credit reporting firms in Canada, Equifax and TransUnion, both allow you to view your report immediately, for a fee. However, both firms also offer your report free of charge, provided you request it in writing.

So what qualifies as a good credit score? Scores normally range from 400 to 900. Scores that start at 600 are good, anything over 750 is considered excellent. Your score is dependent on what credit you have, and your consistency with paying it back. Your credit score changes when your credit behaviour changes. For instance, if you apply for a new credit product, miss a payment or make a late payment. Having many different credit products that are all close to or at the limit can be detrimental to your credit. It is also important to be mindful of credit cards you no longer use that have no outstanding balance, especially if they have an annual fee. Neglecting to pay the annual fee on a card you have forgotten about will very quickly damage your credit. Checking your report for erroneous information can also be beneficial. Mistakes in your name or address can cause incorrect information to come up in your report, which can damage your score as well.

For more tips on controlling your credit, consult a professional Mortgage Broker.

Click here for the full article from the Globe and Mail.