Credit Repair company Canada helps you restore a clean credit report and regularly checking your credit score will not harm your credit score rating. In fact, periodically checking your credit score can help you review and be updated on any errors in your credit report that can obstruct your financial flexibility.
FICO scoring model
This model is used more predominantly in the leading industry. It is created by Fair Isaac Corporation (hence, the name FICO).
The credit scores range from 350-850 and are determined by five (5) factors, which are ranked in terms of importance by percentage:
- Payment History: 35% – Payment History shows your previous payments, whether you are on time or late in paying your debt. It has the most significant percentage that impacts your credit score because almost all creditors will base it on how you spend your credit.
- Total Amount Owed: 30% – higher or lower debt does not affect your credit score; instead, it is based on your credit limit.
- Length of Past Credit History: 15% – the longer your credit history, the higher your score. However, with favorable scores in some categories, you can have a good score even if you have a shorter credit history length.
- Type of Credit Used: 10%. To obtain a higher score, you must have a potent mix of retail accounts, credit cards, and mortgage loans.
- Credit Inquiries: 10%. If you open new different accounts in such a short period, the higher the risk of getting a low score.
Lenders use borrowers’ FICO scores and other details on borrowers’ credit reports to assess credit risk and determine whether to extend credit. Scores range from 300-850, with scores in the 670 to 739 range considered to be “good” credit scores. Maxing out credit cards, paying late, and applying for new credit are all things that lower your FICO score.
What is the importance of checking your credit score rating?
The primary purpose is to eliminate bad debt or any such poor line that may involve in the transaction. It is advisable to check every six months to stay updated and to check for any errors in your account. It helps you with your future credit repair loans. Remember that any minor mistakes can cause you a lot in the future and significantly affect your credit score.
Your credit score reflects on your past credit payments and debt history. Your credit score is one of the things that prospective sellers will ask for. That indicates that your credit extension is based on your credit score scale.
If you desire a good credit score or want to increase your credit score scale, check your credit score periodically. It also reflects your bankruptcy, divorces, judgments, lien, and all the negative and positive remarks. You must make your payments on time or before due to avoid such a thing.
Always remember that credit repair companies are always there to help you regain your clean credit report. Monitoring your credit regularly can help you keep a close eye on how these factors are affecting your score.