You might notice that some people look a little uncomfortable whenever the subject of their credit score comes up either intentionally or purely by accident. What kind of score could be so bad as to make someone look as if they’d rather tell you their social security number than tell you their credit score? Just what is a credit score?
A credit score is a three-digit number that is created through a mathematical formula that utilizes information from your personal credit report. Credit scores can be used to determine what type of risk you’ll be in the event that a lender decides to let you borrow money or a car dealership decides to approve you for car financing in Hamilton. While there are several credit scoring models currently being used, one of the most popular is the FICO credit score. Your FICO score can range anywhere from 300 to 850, with higher numbers being a good indication that you’ve got a good handle on your credit.
There are five essential factors that are used to make up your credit score, including your payment history, amounts owed, types of credit used, new credit and the length of time that you’ve had credit. Each factor counts for a certain percent of your credit score. If you’re wondering how much of an impact a change to each essential factor has on your credit score, the simple answer is that it depends. The reason for this is that there are several formulas used to calculate your credit score. The information that you have in your credit report is used to determine which formula will be utilized. For example, if you’ve just started building your credit you’ll be included in the category with individuals with “young” credit histories.
Even if you don’t care what your credit score is, having a good one will make it much easier on you financially since you more than likely won’t be loaded up with debt and can live your life the way you want to rather than the way you have to.
If you are looking for a car loan in Kitchener, and are a first time buyer, have bad credit, or no credit, Loan Doctor can get you approved. Contact us today