Credit Tips: Understanding and Improving your Credit

Credit Tips: Understanding and Improving your Credit

What is a Credit Report?

A credit report is the primary tool that lenders use to establish a borrower’s creditworthiness. An Individual’s credit report includes personal identification information as well as financial information such as a record of payment history on all credit facilities, on cell phones, and if there have been any collections or past bankruptcies. It also reflects current outstanding balances and maximum credit limits. Additionally, the credit report shows how many times the borrower has applied for new credit. All this information influences a borrower’s credit score.

In Canada, there are two credit reporting agencies, Equifax and TransUnion; however, not all credit providers report to both agencies and the details between reports can vary. In addition to a borrower’s credit profile, lenders often make decisions based on employment, indebtedness compared to income level, and the ability to easily make payments from month-to-month for a sustained period. When considering an application, Canada Guaranty will review both credit reports to ensure they have a complete picture of the borrower’s credit history.

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