Keeping your Credit Score Healthy

Your credit score tells lenders how healthy your finances are and whether or not you are a good risk.

If you want any of the following, your credit score will be checked:

• A Mortgage
• A Car Loan
• A Personal Loan
• A Home Improvement Loan
• A Store Card
• A Credit Card

Your credit history is normally kept at one of the two largest credit agencies in Canada – TransUnion and Equifax. When a lender reads your credit report they usually look for the following information:

How much money you owe

Each loan you have will be set out in the report, together with how much is outstanding. The lender can see when the loans were taken out and how much you pay each month. This will help the lender decide whether or not you can afford the repayments on a new loan.

If you make regular payments on time

The report will outline how regular you pay your loans and whether or not they are on time. Late payments usually flag up a risk factor because you may be seen as unreliable.
If you have had debts in the past

Debts that you have not been able repay will be outlined in the report, together with any action taken by the bank or loan company to recoup their losses.

Living arrangements

A lender will look to see whether or not you own your own home and if you have a mortgage. The length of time you have lived at an address is also recorded. The longer you have lived at an address, the better it is for your credit score.

These are just some of the criteria looked at by a lender. As you can see it is very important to keep your credit score high, especially if you haven’t yet purchased your own home and it is something you want to do in the future.

One of the most important things, is to make all your monthly payments on time and never miss one. This will go down in your credit report and if you are deemed to be unreliable, you will find it difficult to obtain credit in the future.

If you change your job, or you’re monthly pay is delayed for some reason, you might not have money in the bank when your payments are due. Apart from spoiling your credit rating, most banks and credit card companies charge you for missed or late payment.

If you know that the money is due to be paid, then it is much better to take out a pay day loan with a company like Wonga and make the monthly payments to the bank. In most cases a short term loan is far cheaper than a bank overdraft or a fine for a missed payment.

If you have a credit card with lower than normal, interest charges, the bank could cancel this benefit if you don’t make the payments on time, or you miss them altogether.

You can visit Wonga, the payday loan site online. It takes less than 5 minutes to apply for a loan and you will see exactly how much you have to pay back and when. As you long as you pay it back in time, you won’t incur any further interest charges.


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