Credit Score

Known as a FICO score – with a range from 300 to 900 – your credit score tells lenders what kind of a risk you are likely to be as a borrower. Your score is based on the following five attributes, with some attributes weighted more heavily than others.

• • Previous payment history (approx. 35% of score)
• • Current level of indebtedness (approx. 30% of score)
• • Length of credit history (approx. 15% of score)
• • Pursuit of new credit (approx 10% of score)
• • Types of credit available (approx. 10% of score)

At high credit scores (750 and up), lenders offer a quick approval at the best possible rates. This score says the person is reliable and responsible with debt. At lower scores (below 620), you could pay a premium on your borrowing rate and possibly even find it difficult to qualify.

Your credit score captures your perceived lending risk at a moment in time: your score can change from month to month. The companies that hold your credit accounts and loans report transactions to credit bureaus regularly. That’s a great opportunity for you, because it means you can improve your score with the right credit “behaviours”.