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What is a credit score?

Your credit score is simply the result of a formula that translates the information contained in your credit report into a three-digit number. Equifax and Trans Union each use different formulas to determine your credit score. However, for both cases, the higher the number the better your credit score. The formulas are generally based on the FICO model, which was developed by Fair, Isaac and Co. The FICO model determines your score based on the following information:

  • 35% Payment history
  • 30% Amounts owed
  • 15% Length of credit history
  • 10% New credit
  • 10% Credit mix (types of credit)

Factors like age, ethnicity, religion, marital status, salary, occupation and employer information are not important in the calculation of your score.

What is a credit report?

There are two primary credit reporting agencies in Canada: Equifax and Trans Union. Lenders and other institutions provide these credit reporting agencies with information about how you pay your bills and other debts. The credit reporting agencies then compile this payment history and public record information into a credit report. Your credit report will also include:

  • Identifying information such as your name, current and previous addresses, SIN, telephone number, date of birth, as well as current and previous employers
  • Public records, including consumer proposals, bankruptcies and judgments
  • A list of credit grantors and other parties that have received your credit information
  • Other information, including banking information and collections

Maintain Perspective

Your credit report and credit score are a measurement of your past ability to pay back the money you borrowed. Do not use your credit report or credit score as a measurement of your self-worth. We all agree that a good credit rating is important; however, do not lose sight of what your credit report and credit score measure – the past. Use your credit score as motivation to improve your financial future, and remember that the most important things in life are not money and wealth, but family, health, friends and your spirit.

Credit Information Resources

We all know how crucial credit is for our financial future, therefore it is important you know just what your credit score is so there are no surprises. Become an expert of your own credit situation using the credit report request forms below for both Equifax and TransUnion:

Trans Union Credit Report Request Form

Equifax Credit Report Request Form

Smythe Credit Rebuilding Information Sheet

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