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Bernadette Laxamana’s Mortgage Update – Tagalog Version
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Aug 25
Your Credit Score:Know it. Protect it.
In today’s blog I’m going to share with you some more tips about what factors determine your credit score in Canada and how to protect it. This is part two of a two-part series.
As a review from part one of this blog, here again are the five key characteristics or factors that determine your credit score in Canada.
- Payment history – 35% of your credit score
- Amount owing – 30% of your credit score
- Length of credit history – 15% of your credit score
- Inquiries – 10%
- Credit mix – 10%
I’m going to discuss the last two factors today.
4.Inquiries
Inquiries contribute approximately 10% of your credit score and includes the…
- number of recent inquiries
- amount of time since the previous inquiry
Credit score tips – Inquiries
- Do your rate shopping for a given loan within a focused period of time. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur.
- Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.
- Note that it’s okay to request and check your own credit report. This won’t affect your credit score, as long as you order Equifax’s credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers.
You can get a free copy of your credit report by calling Equifax at 1-800-465-7166 Mondays to Fridays between 8am-5pm EST.
5. Credit mix
Credit mix contributes approximately 10% of your credit score and includes the…
- Number of accounts and type of accounts
- Prescience, prevalence, and recent information on trades
Credit score tips – Credit mix
- Apply for and open new credit accounts only as needed. Don’t open accounts just to have a better credit mix – it probably won’t raise your score.
- Have credit cards – but manage them responsibly.
- In general, having credit cards and installment loans (and paying timely payments) will raise your score. Someone with no credit cards, for example, tends to be higher risk than someone who has managed credit cards responsibly.
- Note that closing an account doesn’t make it go away. A closed account will still show up on your credit report, and may be considered by the credit score.
Again just remember the phone number to contact Equifax is 1-800-465-7166. Please contact me if you need any clarification on anything about this blog. Thank you to Equifax for providing us with this information.
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We welcome your questions and feedback.
Bernadette Laxamana’s Mortgage Update – English Version
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Aug 18
Aug 18
Your Credit Score:Know it. Protect it.
In today’s blog I’m going to share with you some tips about what factors determine your credit score in Canada and how to protect it.
There are five key characteristics or factors that determine your credit score in Canada.
- Payment history – 35% of your credit score
- Amount owing – 30% of your credit score
- Length of credit history – 15% of your credit score
- Inquiries – 10%
- Credit mix – 10%
I’m going to discuss the first three factors today and the last two in part 2 of this blog.
1. Payment history
Payment history carries the most weight in determining your credit score.
The biggest contributors to your payment history data is…
- account payment information
- the presence of adverse public records or collection records
- severity of delinquency
- the amount past due on delinquent or collection accounts
- how recent a collection, adverse public record or past due event took place
- the number of past due items
Credit score tips – Payment history
- Pay your bills on time. If you cannot pay the balance in full, make sure you at least make the minimum payment by the due date. You can pay the rest of the balance after the due date.
- Delinquent payments and collections can have a major negative impact on your credit score. If you have a dispute about a bill or payment, pay it on time first, then dispute it afterwords.
- If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your credit score.
- Be aware that paying off a collection account will not remove it from your credit report. It will stay on your report for seven years.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit councilor. This won’t improve your score immediately, but if you can begin to manage your credit and pay on time, your score will improve over time.
2.Amount owing
Amount owing contributes to approximately 30% of your credit score and includes the following…
- All accounts
- Specific accounts
- Number of accounts with balances
- Utilization of some revolving credit lines
- Proportion of balance to original installment loan amount on certain types
Credit score tips – Amount owing
- Keep balances low on credit cards and other “revolving credit”. High outstanding debt can affect a score.
- Pay off debt rather than moving it around. The most effective way to improve your score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
- Don’t close unused credit cards as a short term strategy to raise your credit score.
- Don’t open a number of new credit cards that you don’t need, just to increase your available credit. This approach could backfire and actually lower your credit score.
3.Length of credit history
Length of credit history contributes to approximately 15% of your credit score and consists of…
- Time since specific type of accounts were opened.
- Your average account age calculation.
Credit score tips – Length of credit history
- If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly. New accounts will lower your average account age, which will have a larger effect on your credit score if you don’t have a lot of other credit information.
- Rapid account buildup can look risky if you are a new credit user and may be identified as a “seeker of credit”.
Click here for Part 2 of this blog.
Thanks for reading!
We welcome your questions and feedback.
Bernadette Laxamana’s Mortgage Update – English Version
You can comment on this blog here.
