Your credit report is a summary of your credit history. If you have ever used a credit card or taken out a loan, you have a credit history.

Your credit report is created when you apply for credit or borrow money for the first time. Lenders send this information to the credit reporting agencies (such as Equifax or TransUnion). Your credit report also includes personal information that is available in public records, such as a bankruptcy or consumer proposal.

Your credit report contains factual information about your credit cards and loans, such as:

• when you opened your account
• how much you owe
• whether you make your payments on time or have missed payments
• whether you have gone over your credit limit

Other accounts can also be reported, such as mobile phone accounts or gym memberships. Chequing and savings bank accounts that have been closed “for cause,” due to money owing or fraud committed by the account holder, can also be included.

A credit score is a three-digit number that is calculated using a mathematical formula based on the information in your credit report. You get points for positive actions that demonstrate to lenders that you can use credit responsibly. You lose points for things that show you have difficulty managing credit.

In Canada, credit scores range from 300 to 900 points, with the best score being 900 points. Your score will naturally change over time as your credit report is updated.

Lenders use your credit score to help determine your interest rate and credit limit.

While your score is very important, credit scores are usually not the only thing a lender will look at. Often, they will also consider other factors, such as your income, time on the job or any assets you own.

• Credit accounts, such as credit cards, retail or store cards, lines of credit and loans
• Telecommunications accounts, such as mobile phone and Internet
• Negative banking information, such as chequing and savings accounts closed “for cause,” due to money owing or fraud committed by the account holder, and bad cheques (also called non-sufficient funds or NSF cheques)
• Public records, such as bankruptcy and legal judgments, and registered items, such as a lien on a car or house that allows the lender to seize it if you do not make payments
• Debts sent to collection agencies
• Inquiries from lenders and others who request your credit report
• Remarks including consumer statements, fraud alerts and identity verification alerts.

Your mortgage information and your history of mortgage payments may or may not appear in your credit report and may count toward your credit score. This depends on the practices of each credit reporting agency.

There are several options when building credit to help improve your credit history. Our Financial Services Managers are trained to help coach and guide your family to make an informed decision with helpful, sound advice. Our team has the ability to provide tailor solutions to best fit your financing needs.

For instance, an automotive loan reports monthly to the credit bureau. Generally, car loans establish credit quicker than other forms of credit, such as a credit card. Vehicle loans also show future lenders that you can handle this level of credit, versus a $500 credit card limit. Our Comox Valley Dodge Financial Services Managers are here to answer all of your credit and financing questions, so please do not hesitate to contact us for more information!