The importance of a good credit score is one of the most important considerations in life. Your credit score can determine whether you can get a loan, how much you will have to pay for that loan, and even whether you can rent an apartment. Your credit score is also a measure of your financial responsibility, so it’s important to understand what it is, how to keep it as high as possible and improve it if it’s currently low. In this blog post, we will discuss what a credit score is, how to get your credit score, what affects your credit score, and how to improve your credit score.
What Is A Credit Score
A credit score is a number that represents your creditworthiness. It is based on your credit history, which is a record of your borrowing and repayment activity.
Why Does Your Credit Score Matter
The higher your credit score is, the more likely you are to be approved for loans with favourable interest rates. Conversely, the lower your credit score, the less likely you are to be approved for loans or favourable rates and terms. Having a low credit score can make your life very difficult as you may not be able to get a mortgage, rent a property, obtain a credit card or purchase a vehicle.
What Is A Good Credit Score
As per Equifax’s website (as of October 2022), a good credit score is typically anything between 660 to 724 and 725 to 759 are considered very good, while anything above 760 is considered to be excellent. Having an excellent credit score can make your life a lot easier when it comes to getting loans along with lower interest rates. You can view Equifax’s explanation of what a good credit score is at the video below.
What Affects Your Credit Score
There are a few things that can affect your credit score. These include your payment history, the amount of debt you have, the length of your credit history, the types of credit you have, and new credit inquiries.
How To Rebuild Your Credit History
If you have a bad credit score, don’t despair. There are things you can do to rebuild your credit history. First, make sure you make all of your payments on time from now on. Second, pay off any debts you have as soon as possible. Third, don’t apply to open new accounts unless you absolutely need to. Fourth, try to get a mix of different types of credit. Finally, don’t apply for new credit too often.
How To Get Your Credit Score
The two most common ways to get your credit report is through Equifax or TransUnion ,these are the two most reputable credit reporting agencies here in Canada. You can request your credit report from Equifax and Trans Union via online, phone, by mail or in person. Additionally, if you have a credit car, you may be able to request a copy of the credit score from your credit card company as some banks and lending institutions have started offering this. Below is a short clip with additional information regarding credit scores and how to access yours.
Bad credit can be a real burden, preventing you from getting loans, renting apartments and buying a home. Keeping a good credit score will ensure that you can avoid such burdens and achieve your objectives whether it be real estate related or otherwise.
Hopefully the above has helped explain the importance of a good credit score.
Are you thinking of making a move? Contact me any time with any questions you may have about buying, selling, leasing or the market in general. I’m always happy to help.