What Makes Up Your Credit Score?

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What Makes Up Your Credit Score?

In Canada, just like in any other country, a credit score is a number used by lenders in order to predict the likelihood that you will be able to pay off your debt in the future. Money lenders use it in order to verify pieces of information pertaining to you like the loans and mortgages you are currently paying or your repayment history of other debt. Even if you are someone who has never really been keenly interested in financial things, it is imperative for you to know what makes up a credit score. Once you are aware of the factors which affect it, then only can you work towards improving it.

  • Payment History- 35%
  • How much is owed-30%
  • Total length of credit history- 15%
  • New credit applications- 10%
  • Types of Credit used previously – 10%

These are the key factors which make up your credit score. If you believe that your credit score does not matter much, then you are sadly mistake. Chances are that if your score is not very good, then it is unlikely that you will receive a loan which is affordable for you. Keep in mind that a little care truly goes a long way when taking care of finances so do make sure that you are making that extra effort. Once you have a good credit score then the world is your oyster! You can go on to take emergency cash loans if needs be without any trouble at all and you will also be able to become a homeowner without any trouble at all.

The divisions above are taken rather seriously in most places the world over especially in Canada so do make sure that you act in a responsible manner. Credit Score can change for the better or worse rather quickly so make sure you always have your eye on it!

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