Your credit score and credit report play a vital role in your ability to qualify for a loan, whether you are applying for a new credit card, auto financing, or mortgage. Both pieces of information evaluate how you obtain, use, and pay back debts. They are also important tools that banks and financiers rely on to determine your risk level when lending you money – and at what interest rate.
Understanding how credit ratings and reports interact, therefore, is crucial.
Your credit report is a summary of your history and is created when you borrow money or open a new credit account for the first time. It contains your personal, financial, and credit information.
Lenders send information about your accounts to Canada’s two main credit bureaus, which include Equifax and TransUnion. These private companies are responsible for the collection, storing, and sharing of credit information for Canadians. Generally, it takes one to three months for updated information to show up on your report.
What is a Credit Score in BC?
Who Can View Your Credit Report and Score in BC?
Why Does Credit History Matter in BC?
Since financial institutions assess your credit score and report to determine whether or not to lend you money, a low rating can be very detrimental. You may find it difficult to qualify for a loan or get charged higher interest rates due to a poor score. It can also be more challenging to pass background checks by potential employers and landlords, thus hampering your career and housing prospects.
On the other hand, good credit history increases your chances of loan approvals and you may also be able to secure lower interest rates, like 0% financing. This can save you a great deal of money over the course of a loan term and avoid disappointment when borrowing.
Contact TransCanada Finance to Improve Your Credit History With an Auto Loan
