How to Understand, Manage and Improve Your Credit
Most of us know that we have a “credit rating”, but not everybody knows what their beacon score is or how it’s calculated.
Your credit worthiness is assessed two ways:
- Beacon score, and
- A detailed history.
Credit scores range from 350 (low) to 850 (high), with 750 being the median. The numerical score is calculated on previous payment history, current indebtedness, credit history length, number and frequency of new credit inquiries and, types of credit held. Two so-called “Beacon killers,” are payments more than 30 days late (even small amounts) and maxed-out credit cards. The detailed history adds personal information, banking information and specifics on accounts and payments.
Repairing your bruised credit may not be easy, but over time it can be done. Here are three strategies I recommend:
- Pay all bills on time – late payments hurt ratings.
- Keep credit balances below 75% of the maximum.
- Avoid applying for additional credit; too many applications in a short period signals financial difficulties.
You can pull your own credit bureau without it negatively impacting your credit score: https://www.econsumer.equifax.ca/ca/main