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How To Read A Credit Bureau

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How To Read A Credit Bureau

  1. 1. How to Read a Credit Bureau July, 2010 Romy Alegria, Manager Mobile Mortgage Specialist P: 416-278 2540
  2. 2. Sections of the Bureau <ul><li>Beacon score </li></ul><ul><li>Personal information </li></ul><ul><li>Current and former addresses </li></ul><ul><li>Recent inquiries </li></ul><ul><li>Current and former jobs </li></ul><ul><li>Trades </li></ul>
  3. 3. Analysis/Breakdown <ul><li>Payment History = 35% of your score </li></ul><ul><ul><li>Based on your payment history over the last few years </li></ul></ul><ul><li>Current Debt Load = 30% of your score </li></ul><ul><ul><li>How much money you owe and how many different creditors you it to </li></ul></ul><ul><ul><li>How much debt you would have if you maxed out all your available credit is also considered </li></ul></ul>
  4. 4. Analysis/Breakdown <ul><li>Age of Accounts = 15% of your score </li></ul><ul><ul><li>Rating based on how long your accounts have been open. The longer the better </li></ul></ul><ul><ul><li>It is recommended that you have at least 3 credit accounts open for over 1 year for a better score </li></ul></ul><ul><li>Type of Credit = 10% of your score </li></ul><ul><ul><li>Bank loans, credit cards, and revolving debt accounts impact your score in a different way </li></ul></ul><ul><li>Credit Inquiries = 10% of your score </li></ul><ul><ul><li>Your score temporarily drops each time someone pulls your credit report </li></ul></ul>
  5. 5. Arm Yourself with Knowledge <ul><li>Many Canadians have never looked at their own report </li></ul><ul><li>Don’t fall victim to being unaware of your credit history </li></ul><ul><li>Don’t wait till you need credit to know your credit history </li></ul><ul><li>Improve you credit rating before you apply for a mortgage </li></ul><ul><li>Take control - learn and understand your history </li></ul>
  6. 6. What is reported? <ul><li>Information such as: </li></ul><ul><ul><li>Name, address, date of birth and SIN </li></ul></ul><ul><ul><li>Number of inquiries (past 3 years) </li></ul></ul><ul><ul><li>Name of credit grantors and dates that accounts were opened </li></ul></ul><ul><ul><li>Credit limits, balances, monthly payment amounts, late payments, etc. </li></ul></ul><ul><ul><li>Public records such as bankruptcies, judgments, etc. </li></ul></ul><ul><ul><li>Third party collections and/or orderly payment of debt </li></ul></ul><ul><ul><li>Consumer statement: allows you to add comments about information on your report </li></ul></ul>
  7. 7. Tips to Improve your Rating <ul><li>These scores range between 300 and 900 </li></ul><ul><ul><li>The higher the value the better your rating </li></ul></ul><ul><li>Make payments on time, increased payments (not just the monthly minimum), lump sum payments </li></ul><ul><li>Do not carry balances close to or that exceed your limit </li></ul>
  8. 8. Tips to Improve your Rating <ul><li>Do not carry too many accounts with balances </li></ul><ul><ul><li>If your balance is at $0, close the account if it is not needed </li></ul></ul><ul><li>Inquiries: Limit the number of inquiries made on your report to a minimum </li></ul><ul><ul><li>Inquiries lower your score </li></ul></ul><ul><ul><li>Do not appear as a “credit seeker” to financial institutions </li></ul></ul>
  9. 9. How do you Obtain your Report? <ul><li>There are 2 agencies that you can contact to obtain your credit report: </li></ul><ul><ul><li>Equifax: www.equifax.ca or 800.465.7166 </li></ul></ul><ul><ul><li>Trans Union of Canada: www.transunion.ca or 800.663.9980 </li></ul></ul><ul><li>The websites offer additional services such as detailed analysis, credit monitoring, and tips to improve your rating </li></ul>
  10. 10. Want more information Call me for a pre approval or more information about how to improve your credit score! Romy Alegria, Manager Mobile Mortgage Specialist P: 416-278 2540