Demystifying Credit Score Concepts

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High ScoreShow of hands, if you will, readers:

Who has checked their credit score in the past year?

Statistics recently released by the Bank of Montreal suggest that only fifteen percent of Canadians would be waving their digits in the air in response to this question if I asked it in a decently crowded room at this very moment. Even more surprising was the finding that fifty-six percent of Canadians have never checked their personal credit score.

Are you one of the fifteen percent? The fifty-six? Why, or why not?

Your credit score distills a relatively vast amount of information about your financial picture into a single value. It is a record of how you’ve paid your debt, and shows how much debt you have and whether you’ve made payments on time. It is by no means the sole important thing about you as a creditor – Progressa was in fact created to challenge this very notion, using a broader view of your financial picture to work through the ways a lower than average score might limit your access to capital.

However, being able to check your score periodically is the first step to putting together a plan to manage your use of credit. You can order your own credit reports free from the three major credit reporting bureaus (Equifax, Experian and TransUnion) annually and check to see if there are any errors or problems – and, contrary to the expectations of one fifth of Canadians, checking does not have a negative impact on your score!

 

 

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