What is a credit rating?

The credit rating is an instant view of the financial capacity of an individual at a given time. It is obtained by the evaluation of all the information known on a borrower regarding his term loans, credit card history, and credit margins. Most lenders will quote an R (revolving credit, a line of credit for example) or a I rating (personal term loans)

They will quote each element of your file. For example a R0 means that the debt is too recent to have been quoted, R1 means that you pay within your 30 day period within the due date and an R9 means they have written you off (poorest credit rating). Any other pertinent information such as bankruptcies, judgments, arrangements and repossessed house or car will appear on your file. The information, positive or negative will appear for 2 to 7 years, depending on the type of information.

These credit quotes are calculated by credit evaluation agencies such as Equifax or Trans Union and are clearly indicated on the reports. In Canada, all creditors use the term credit rating or Beacon score. This quote varies between 300 and 850 and is considered very good over 700.

Why is your credit rating important?

When you manage your finances in a responsible manner, banks and other creditors will be more inclined to approve mortgage loans, car loans and credit in general, they will more likely give you higher credit limits with better interest rates. A solid credit file will permit you to save large amounts of money. The higher the credit score the better the rate.

How can you obtain and verify your credit rating?

By mail
If you request your rating in writing by mail, all agencies will send you a free copy of your credit score. It is important to include 2 valid proofs of identity. Contact the agencies to verify which document will be acceptable.

By internet
"You can order your credit score by email through their websites, this method is faster since you receive your credit rating in a few minutes. The offset is that there will be fees to obtain the information.

Source Multi-Prêts