Your credit score is a number that lenders look at to assess your credit worthiness when you apply for a loan or mortgage. Your credit score is important in determining:

  1. Whether you qualify for a loan.
  2. The interest you will pay on your loan.

Payment History
Paying your bills on time is critical to maintaining a good credit score.

Debt Ratio
Credit rating agencies look at the amount of debts you owe & the types of debt you carry including credit cards, student loans, car loans, lines of credit and other bank loans.  Having debts does not mean you are a high risk debtor. In fact, having some debt is generally seen as a good thing.

Credit History
For how long you have used credit? Even if you have only been using credit for a short period you can still have a good credit score if you show positive results for all other factors.

Type of Credit Used
Your score will also be impacted by the types of credit you use. For example: Payday loans may report payments to your credit report however these types of loans are looked upon less favourably than mortgages or car loans.

New Credit
Your score does not drop just because you apply for new credit. But, repeated applications for new loans that are turned down can have a negative effect on your credit score.

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