Understanding your Credit Score

Hello Everyone! Today I wanted to talk a little bit about understanding your credit score. Establishing your credit is key to ensuring long term financial health. Theres no better way to put it but your future depends on it. When it comes to credit scores, 720 or above is where you want to be. Your credit report reflects the following information:

• Credit activity over time and how you manage your debt
• Personal Information
• Different types of accounts you have including revolving and installment accounts
• Any outstanding collections

Knowing your credit score and how to improve it can save you thousands over the life of a loan. If you’re looking to purchase a home or car or just prepare for a future event that could require some sort of financing, then you may want to incorporate a few of these tips to maintain and improve your score:

1) Know your number – Credit scores range from 300 to 900. There are many ways to order your credit report, such as by phone or fax. The best way is by internet through a credit reporting agency such as Equifax or TransUnion.

2) Review your report – When you receive your credit score, its important to ensure that the information in the report is correct. If the score is lower than you would like, read it carefully to find which factors are most likely having a negative influence on the socre, and work on improving it.

3) Pay the minimums or more - Make sure that you are making your payments in full and on time. If you can’t afford to pay the entire balance, then at least pay the minimum. Set your accounts up for automatic payment to avoid being late or missing a payment.

4) Pay down your debt – Your score is also dependant on how much you owe. If you’re overextending yourself , a potential lender may look at this unfavourably. Try to find ways to also lower your interest on high interest rate cards. A debt consolidation is an option you may want to consider before applying for any other credit.

5) Don’t go over 50% of your credit limit

6) Apply for credit in moderation

7) Dont be afraid to ask for HELP - There are a few not-for-profit counselling services available for those of us looking for a plan to alleviate debt and improve credit scores. A free consultation with Credit Counseling Services of Canada Inc. or Credit Canada could help you with a specific debt repayment plan and strategies to improve your score and offer you peace of mind.

No matter what type of mortgage financing you are looking for, it makes sense to speak to me first. Thank You!

Sincerely,
Josephine Ng
www.tdmortgage.wordpress.com