They say that knowledge is power – so, for those of you who are unfamiliar with how credit scores are calculated prepare yourself for a simple but effective explanation for just how and why your score ends up at its current number.
The process is actually, despite what the topic may otherwise suggest, pretty interesting. Ask yourself, first, what is a credit report? Simple: A credit report is a breakdown and overview of your financial obligations weighed against your financial history. In this way, it forecasts based on your personal history and offers others insight into your financial potential.
There’s a reason people care about your credit score, after all, it’s a financial story that describes where you are and where you’ve been financially-speaking. With a range starting at 300 and going up to 900, it’s rather important to note that there are slight calculation differences that are dependent on the company being used to reach a final score.
If we are to be a little more general, any score that falls below 580 is regarded as less-than-optimal. Not that it means you’re in a terrible situation, really, but it means you’ve had some complications in the past that will make possible loan applications a little more difficult. Now, on the other hand, scores exceeding 780 suggest you are reliable and in good standing.
There are just two companies Canadians need to think about when it comes to their credit score – Equifax and Trans Union. That said, we can’t ignore that there are other, less reputable companies that offer similar scoring systems but most lenders will show preference to Equifax and Trans Union.
It also pays to remember that credit reports are offered freely.
Let’s look at the hard numbers, shall we? With nearly 36% of the population holding a credit score of 700 or higher, you can do the math and realize that most people don’t factor into a position where they will look like the ideal candidate for loans. If you exist in that 64% and you’re looking for a company that will work with you – you’ve found it with DreamCatcher Financing.
Some would tell you that there is a simple equation that can be applied to understand your score, which goes something like this: if you have a score of 800/900, it can be interpreted as meaning 800 out of 900 people will be able to repay their loans on time and without personal complications. As you might imagine, having a score of 380/900 doesn’t make you look great for potential to repay.
Don’t fret! By working with DreamCatcher Financing you can expect the right attitude to help you get back on the track for a better credit score in the future. Your credit score is a result of a combination of factors – including payment history, how much you currently owe and the length of your credit history with additional factors that include new credit applications and types of credit you have used. Combined, these offer an approximate overview of how you appear to potential lenders.
This is all to say that you can improve your credit score with careful financial decisions, among them, choosing to work with a company like DreamCatcher Financing. Let’s get you the car loan that you want for the car you deserve while we repair your credit at the same time!