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Why should you know your credit score in Burlington?

Why should you know your credit score in Burlington?

 

When anyone talks about big purchases like a vehicle or a house, the topic of credit scores always comes up.  When you’re in Burlington looking to get a mortgage or a car loan, you need to know your credit score before you even begin.

First things first: what is a credit score?  It’s a number (between 300 and 900) determined by credit bureaus based on 5 factors:

  • Payment history
  • Debt usage ratio
  • Credit history
  • Frequency of credit applications
  • Diversity of credit

These combine to paint a picture of your ability to handle your debts.  Lenders use this number to decide how risky an investment you are.  If you have a score between 700 and 900, good for you!  You won’t have any trouble getting a loan with a good interest rate.

Therefore, it’s important to know where you stand on the credit scale before you go loan shopping.  If you fall below 650 your options will be much slimmer, and you may be wasting your time by applying for loans from banks.  Each time you apply for financing, it’s noted on your credit bureau profile and being denied over and over can have a negative impact on your score.

If you find out you don’t have a great credit score, it may be worth your while to work on improving it before you move forward with a large purchase.  Obtaining a car loan from a dealership that offers low credit financing can help you improve your score when you make your payments every month.  Payment history is the largest factor of the 5 listed above that are used to calculate your score.

Set yourself up for future financial success by using bad credit financing to build up your score before moving on to larger purchases like a new home.  At Car Nation Canada Direct, we specialize in helping people with low or no credit take steps in the direction of financial freedom, so let us help you by getting you into a great car!

 

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Categories: Credit Score

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