Credit Score - What determines credit scores?

Most people don’t understand credit scores or haven’t even seen their credit bureau.  If this is you, I recommend that you review your credit score as soon as you can.  Your credit score is a major factor in determining whether you can get a mortgage, how much down payment will be required, how much money the bank will lend you and what rate of interest you will be charged.

Your credit score ranges from 300 to 900.  The higher the score, the better.  The credit score predicts your probability of defaulting on your debts within the next 2 years.

How is the score determined? There are five criteria: (1) Your payment history; (2) Amounts owed; (3) Length of credit history; (4) New credit; (5) Types of credit in use.

Knowing the factors will allow you to improve your score.

It takes time to improve your score.  You should work with a mortgage broker who can guide you with a strategy to improve your score.   At BCMortgage.ca, we provide you with a copy of the FICO booklet.  The booklet prepared by Fair Isaac Corporation, the company responsible for creating FICO scores, is an indispensible tool since it explains how the scores are arrived at.  Once you know how scores are determined, you will be able to determined a strategy to bring your score up.

John