What's a credit score? (And its everyday uses)
Well, first let’s talk about what a credit report is. Your credit report shows your history of borrowing and details on any loans you’ve taken out, as well as other info like how many times you get your credit checked and how close you are to maxing out your balance. Oh yeah, and if you’ve been avoiding those parking tickets or your phone bill from 2011, those get written up in your report too.
The score is calculated based on secret algorithms using all the above—and more. It can be a measure of risk for lenders who are thinking about whether they want to offer you credit. Generally, they look at your credit score to judge whether you’d be prone to doing things like not paying your bills on time, maxing out your credit cards, etc. etc.
But, if you don’t ever use credit, that could also lower your score as you’re not showing that you’re capable of managing credit like a grownup.
Canadians’ credit scores
Who’s looking at my credit score?
Lenders and Financial Institutions
The Business World
For example: I sell geranium arrangements and I need ceramic pots from a supplier who will let me pay the invoice 60 days after the order’s received. The supplier will probably want to see a personal credit check first before offering me supplier credit. (What if I have a habit of skipping town without paying my bills??)
Where can I see my credit score?
Chantel Chapman is Mogo's Financial Fitness Coach and Credit Score Expert. She teaches you how to be an adult, and is also the host of our Adulting 101 events. With over a decade’s experience as a mortgage broker, Chantel recognized a need for financial education with many of her first-time homebuyers, so she began creating custom content to help guide them. Chantel is the founder of Holler For Your Dollar, a consulting firm that jump-starts anyone who’s ready to dive into the world of Adulting or entrepreneurship. Her role at Mogo puts her skills to use creating and teaching digestible, yet educational financial literacy content geared to millennials and daring entrepreneurs.