While credit scores seem to be arbitrary, they're actually determined
according to a rigid mathematical formula. Every debt, credit card and
late payment is weighed differently -- and these weights differ between
TransUnion and Equifax. In general, Equifax Canada weighs its components
something like this:
Payment History -- 35%This typically involves recent payments that are more than 30 days late, as well as any collections, judgements or bankruptcies
Outstanding Debt -- 35%This includes the
number of creditors owed, credit card balances and allocated limits. A
maxed out credit card will have a deeper impact on your credit score
than a card with a $200 balance
Credit Account History -- 15%This refers to
the length of time your accounts have been open. If you've been using a
credit card for ten years and have been paying it off on a regular
basis, this actually has a positive effect on your overall credit rating
Recent Inquiries -- 10%Every time you apply
for a loan or credit card, lenders have to access your credit report to
see your score and assess your credit worthiness. Too many of these in a
12 month period -- say, if you were shopping around for a mortgage --
can reduce your rating.
Types of Credit -- 10%If you have a mix of
different types of credit -- including revolving credit, such as credit
cards and lines of credit, and installment loans that you pay monthly,
such as student loans -- the better your credit picture will be.
Fabulous and useful information! Thank you.
ReplyDeleteI had understood that if Mortgage companies were pulling reports within a short period of time ie 15 days, there was no detrimental impact on the credit bureau.
It was assumed that you were shopping a large ticket item.
Living in Toronto
David Pylyp
How I Got My Ex Husband Back...........
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