Canada Bankruptcy

What is a credit score?

Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers. 

There are many different ways to work out credit scores. The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender. Please visit their web sites for more details

 

Equifax:      http://www.equifax.com 

TransUnion:  http://www.tuc.ca

Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay.

What is a credit score?

Your credit score is a judgment about your financial health, at a specific point in time. It indicates the risk you represent for lenders, compared with other consumers.There are many different ways to work out credit scores. The credit-reporting agencies Equifax and TransUnion use a scale from 300 to 900. High scores on this scale are good. The higher your score, the lower the risk for the lender.Lenders may also have their own ways of arriving at credit scores. In addition, lenders must decide on the lowest score you can have and still borrow money from them. They can also use your score to set the interest rate you will pay. 

How is it computed?

Approximately once each month every major lender in Canada (the banks, credit card companies, finance companies) sends a report about their borrowers to the credit bureaus. The credit bureaus collect this information, summarize it, and sell it to their members, the lenders.

Credit Reporting

A credit bureau is an information service, where companies that extend credit for loans or purchases share all their experiences with borrowers. When you ask for credit, the lender will want to know the risk that you will not repay them as agreed. They get your “credit report” from the credit bureau, and estimate the risk according to your past borrowing history. To get any significant credit, you need a good borrowing history.

 

Understanding your Credit Report and Credit Score:

	Years  on  file
Credit transactions (trades) Late/ Missed payments,	6
Judgments	6
Collections	6
Secured loans (registered items)	5
Bankruptcy   (from the discharge)	6
Consumer Proposal ( after full settlement)	3

R	REVOLVING CREDIT – CREDIT CARDS AND LOANS
R0	Too new to rate:
R1	Pays in time 30 days
R2	Missed one payment 30 days to 60 days
R3	Missed two payment 60 days to 90 days
R4	Missed three payment 90 days to 120 days
R5	Account over 120 days due but rated as R9 Yet
R7	Making regular payments under consolidation of loan
R8	Repossession
R9	Bad debt, Bankruptcy