Credit Score 101
Your credit score is a numerical summarization (300 to 900) of your creditworthiness—the higher, the better. Credit scores are based on credit reports—or records of an individual’s financial history as reported by TransUnion Canada and Equifax Canada. If you have auto loans, credit cards, student loans, or a mortgage, your management of those accounts is objectively summarized on your credit report. In Canada, consumers can request—in writing—hard copies of their credit reports as many times a year as necessary.
Several factors can bring your credit score up, or drag it down. River City Hyundai can help you determine which factors directly affect you, based on your unique credit history. Credit types, unpaid credit balances, credit used vs. credit available, and how often you apply for credit are all taken into account. The largest deciding factor is your payment history. Canada uses a letter/number rating system to help consumers understand their finances. For example, if your report shows an “I1” rating, you have an installment loan that’s up-to-date on payments.
Knowledge is Key
Knowing your credit score can benefit you in more ways than one. Monitoring the ups and downs of your credit score provides insight into the weight of your financial decisions. Your credit report highlights credit accounts that require your attention, be it a missed card bill or student loan payment. Not checking your credit score makes your credit report more susceptible to inaccuracies and misinformation, such as open collection accounts that should be closed, or an unfavorable “R9” rating on a credit card bill you pay regularly.
Cars and Credit Scores
Your credit score affects multiple areas of life, including buying a car. If you’re applying for an auto loan, your credit score helps determine your eligibility. If your score is high, you’ll have an easier time securing good financing terms. Later down the road, you’ll likely pay lower car insurance premiums, putting a little extra money in your pocket every month. With River City Hyundai’s help, you can learn how to boost and maintain your credit score, so you’re prepared when you visit the dealership!