Your credit report and credit score are crucial for your financial well-being. Whether you’re applying for a loan or a credit card, the basis of your creditworthiness is your credit report and score. This blog will explore the basics of credit reports and scores and provide a complete guide to understanding them.
First, let’s define what a credit report and score are.
Your credit report summarizes your credit history, including any loans or credit cards you have, payment history, and any delinquencies or collections. Your credit score, on the other hand, is a three-digit number that represents your creditworthiness. It is calculated based on your credit report and ranges from 300 to 900, with a higher score indicating better credit.
Let’s dive into the details.
The Financial Consumer Agency of Canada (FCAC) is the primary source of information on credit reports and scores. According to the FCAC, a credit report typically contains the following information:
Reviewing your credit report regularly is essential to ensure its information is accurate. If you find any errors, you can contact the credit reporting agency to have them corrected.
Now, let’s talk about credit scores.
Your credit score is calculated based on five factors:
It’s important to note that your credit score can vary between credit reporting agencies, as each agency may use a different scoring model.
In conclusion, your credit report and score are essential factors when it comes to your financial well-being. It’s important to review your credit report regularly, ensure its accurate information, and maintain good credit habits to keep your credit score high. By following the information provided, you’ll better understand credit reports and scores.