Credit Reports

Taxes are almost due, so why not take the extra time to look through your credit report and see how well your credit is? To find your credit report, you can choose between the two credit bureaus of Canada: Equifax and Transunion.

Credit bureaus summarize your credit using a report. The credit report is one of the main things lenders look at when they decide whether or not to give you credit or increase your loan. A credit report contains your history of credit use, your credit ratings, and your credit score. An easy way to think about how these relate to each other is to think of the credit bureau as a school. The credit report is your report card. The credit rating is your grades in each subject. The credit score is your overall grade point average.

I have my credit report, but how do I read it?

Well, all account ratings contain a number and a letter. The letter is an R, I, or O. This refers to the type of credit you have.

R” stands for revolving credit.  This type of credit that does not have a fixed number of payments. An example would be your credit card.

I” is for installment credit. It’s the type of credit that has a fixed number of payments, like a mortgage, student loans or car payments.

O” stands for open credit. This is the kind of credit where you get a monthly bill in the mail and you are expected to pay it in full. Examples include a phone bill or utility bill.

Each credit account also gets a number rating on a scale between 0 and 9. R1 means you pay your bills on time according to the terms of your credit agreement. R9 means you have not paid your bills as agreed and the account has been placed for collection. The lower the number the better! It’s also the only time where getting a low number on your report is ideal.

So how well will people view your report? Are you creditworthy?

References: 

http://www.theccfl.ca

http://www.123creditfacts.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s