Your Credit Score – taux hypotheque
By Mark Steed
Unless you are looking to buy a car or home, you probably don’t even know what a FICO score it, never mind what yours is. But if you are, it is most likely something you think about all of the time.
What is this rating called FICO? The letters stand for Fair Isaac and Company. This company has a proprietary method to calculate a number, or “score” for any consumer to determine if he will be a good risk for a lender.
Often the FICO score is called the credit rating, the credit score or maybe just one’s credit. They all mean the same thing; a lender is trying to find out whether a potential borrower is a good risk.
To do this, they pay for a report prepared by a company that specializes in obtaining this information. The main credit agencies that banks and other lenders utilize are Equifiax, TransUnion and Experian
Each of these firms has a slightly different way of arriving at the total score, and because of this, most lenders like to use all three and then work with the average of the three to arrive at what they feel would be the truest measure – pret hypothecaire.
This is all calculated on information based on the consumer’s credit dealings through time. If a consumer is late in paying a bill, or doesn’t pay a debt at all, this will be reported by the store, credit card company, utility company or landlord to the main credit rating agencies. The main credit agencies gather this information and use it to calculate a score.
A higher number will result in a higher credit score, which will mean an increased chance of securing a loan. FICO scores can range from 300 to 850.
Each bad transaction with any of your financial partners such as a credit card company, department store, bank, etc. will be recorded. The credit agencies gather this information from all of these entities and start a file on each consumer – taux hypotheque.
The highest score, 850, will be reduced by negative transaction in your file. Paying bills late, or keeping your credit card balances too high will be reflected in the report. The more reductions because of these harmful transactions with the companies, the worse your score will be. Enough reductions and your score will go below 350, probably a score to low to be able to get a mortgage or any other kind of major loan.
The reason for this is that a lender will assume if you have been willing to fall behind on your debt obligations with another lender, you will be likely to do the same with him – pret hypothecaire.
Borrowers who usually pay on time and maintain low balances will have a better chance of getting a loan. Consistent late remittances and even non payments will most likely result in a very low score and little chance of obtaining a loan.
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