Credit Score aka Beacon Score
This blog is about Credit Score aka Beacon Score. By the end of this blog post you will have a good understanding about Canadian Credit System. You will know how to read your credit report and gauge your options for next mortgage approval.
Credit Score
Canada has a semi government credit system which maintains your credit related data. When you seek any kind of credit including mortgages, lenders evaluate your credit worthiness on the basis of your credit score within your credit report.
Equifax use the scale of 1 to 9. 1 means you pay your bills within 30 days of the due date. Rating of 9 signifies that the borrower never pay bills and has submitted a consumer proposal to the lender.
This credit system uses three letters I, O, R that are also used in front of these 1-9 numbers tell about type of loans that are being applied for.
What are 3 Elements of Credit Score?
All Installment loans are reported to credit score.They are denoted as “I “.This means you have borrowed money and had agreed to pay it back via regular installments for a specific period of time until the loan amount is paid off in full. The best example will be a car loan.
On your credit report it shows as I 1, 2…9. The higher the number besides the letter I, the worse your credit score will get.
When money is borrowed as you need up to a predetermined maximum limit, its called Open Credit.The total amount is due at the end of every period.
This group includes line of credits, as well as student loans, in which the borrower does not owe anything up until out of the school.
On your credit report it shows as O 1, 2…9. The higher the number besides the letter O, the worse your credit score/ beacon score will be.
This shows that the borrower has a maximum amount of credit. He/ She makes regular payments depending upon the outstanding balance of the maximum limit.
Credit cards fall into this category.
Under Canadian credit system your credit report shows the above-mentioned ranking and classifying codes to describe the status of every category of loan. It could go backward in time up to two years.
This scale shows the number of times you paid your bills 30, 60, 90 days after due date. The coding on credit report may look like R2/I1/O3/I9 etc.
If you’re planning to buy your own home, consolidate your credit card debt or seeking a new mortgage and are having some difficulties to know your options, you are invited for a Free Strategy Session with one of our mortgage broker in Brampton, Mississauga and Toronto area.
You can discuss different ways of structuring your home mortgage while leveraging your credit score efficiently.
We’re confident that a simple conversation with you could open up opportunities to debt reduction, pay off your mortgage quicker or even qualify you for a higher mortgage amount.
Consolidating your debt? Seeking a home renovation loan? Planning for a new mortgage? The good news is we can provide you personal, time-saving service.
You need not to go shopping on your own, looking up for weeks and still wouldn’t know about all the awesome options available to you. A quick phone conversation with mortgage broker mortgage delivery guy will give you the information on your credit report including credit score aka beacon score.
Mortgage Qualifying Rate
PRESENT (As of JUNE 01, 2021)
PAST (Before July 20, 2019)
5.25%