People seeking lending services are at an all-time high. Before entering any lending institution, it is always advisable to know your credit score first. Your reason for doing this is so you can if you can qualify for a low-interest loan provider. By knowing your score, you can potentially save thousands of dollars in interest. If you suspect that your credit is atrocious & there’s no reasonable way to pay off your debts then you might want to consider a proposal. Here’s a link to understand What is the Difference Between a Consumer Proposal & a Consolidation Loan?
Free Credit Score Estimator – click here
The estimator gives a nice ballpark number. It works by just adding in some general information about your debts. I’ve personally found that it worked in my case when I was exact, but I recommend to check your actual score with both credit bureaus – Transunion & Equifax. You can have a free look at your report once a year, and the monthly subscription thing is optional. Here’s the Credit Report. The calculation algorithm for each company is different however all institutions report your history to these agencies.
What is a Good Credit Score?
Most credit scores – including the FICO score and VantageScore 3.0 – operate within the range of 300 to 850. Within that range, there are different categories, from bad to excellent. They generally look like this:
- Excellent Credit: 750+
- Good Credit: 700-749
- Fair Credit: 650-699
- Poor Credit: 600-649
- Bad Credit: below 600
What Score Do Banks Use?
From my personal experience, the banks will only offer you loans after 700+. Bank credit cards are given above 600+. It’s possible to get loans below these scores, but you’ll need to check if you have to pay much more than what the initial balance is. (Sometimes it’s double of what you borrowed!)
Rebuild Score for Credit Report
If you’re looking at building up your score, you’ll need to make over your minimum payments regularly. If your balances decrease monthly, it helps show positively to your credit utilization. (Credit utilization – some outstanding balances on all credit cards & loans divided by the sum of each debt’s limit) The second way is to use our credit rebuilding plan. It’s a forced savings plan which reports to your credit bureau monthly. For more information contact me
Thanks goes to Tom Drake at Canadian Finance Blog for the calculation