Credit Score


Credit Score

In Canada your Credit score is such an important thing. It is a numeric representation of your payment history, debt situation and much more.  The credit score is also referred to as a FICO Score and is a mathematical formulae created by Fair Isaac and Company.

The credit score is used by most companies to see if you are a good credit risk or not. Equifax and Trans Union will crunch the numbers from the credit report, and spit out a number somewhere between 300 and 900, or even no number or R for Reject.  A score over 680+ is considered excellent.

How Scores Are Calculated




Payment History

Bankruptcies, late payments, past due accounts and wage attachments, collections, judgments



Amounts Owed

Amount owed on accounts, proportion of balance to total credit limit



Length of Credit History

Time since accounts opened, time since account activity



New Credit

Number of recent inquiries, number of recently opened accounts



Types of Credit

Number of various types of accounts (credit cards, retail cards, mortgage, line of credit, loans etc)






Credit scores are now checked by almost all the institutions that are giving you any type of loan/credit. That is just to make sure that you are a person who pays back on time. It also gives an idea about the clients payment habits.

 How you can improve your credit score

  1. Order a copy of your credit report annually, review it carefully and correct any significant errors:
    3. Pay your bills on time
    4. If you have a questionable credit history, you should open a few new accounts, use them responsibly, and pay them off on time
    5. Don’t open accounts then don’t use them.  Having 6 or 7 of the same type of credit card does not work in your favour
    6. Have a credit card or instalment loan can help boost your score, so long as you don’t have a high balance
    7. Keep balances low in relation to the available credit.  If the credit limit is say $10,000, keeping the balance below $2,500 (or 25% of the limit) will improve your score, balances over $7,500 (75% of the limit) will decrease the score.  Going over the limit has an even more negative effect
    8. Pay off credit card debt instead of moving it around to lower rate cards.  Moving balances to other credit cards and closing out the old account can hurt the score


If you have any questions about improving your credit, please speak to Amit Ambegaonkar and he will give you perfect solutions to your credit issues.

~ Amit Ambegaonkar

Mortgage Agent 

Mortgage Alliance (#10530)