Table of Contents
1. Who is Credit360
2. Credit Score Breakdown
Who is Credit360
Are you tired of your low credit score and find yourself thinking, “repairing credit shouldn’t be this difficult?” If yes, then you’ve come to the right credit repair service! Credit360 is a credit repair company serving all of Canada. Our team of credit repair consultants are driven to fix your credit no matter the score.
Let us tell you a bit about us and how we can fix your credit score! We understand how important maintaining good credit is to live a fulfilling lifestyle. That’s why we made it our priority to help those who need a credit fix! Our credit repair consultant team aims to pinpoint any information that weighs down your credit score. A credit specialist will contact the associated bureaus to remove the information on your behalf. By removing such information from your credit history, you can watch your credit score rise to live the life you aspire to have. Our team of certified credit consultants strives to fix your credit while fulfilling all your customer support needs.
Credit Score Breakdown
We’re here to assist you with all your customer needs. That’s why we listed a breakdown of how credit bureaus calculate your credit score.
Credit bureaus evaluate several factors to determine your credit score:
- Payment History
- Credit Utilization
- Credit History
- Public Records
- Inquiries
Each factor is measured differently from importance to less important, but each is essential to determine your overall credit score. Visit Equifax or Transunion for a free credit report to check your credit score. Equifax and TransUnion are two reliable Canadian credit bureaus that give you the most accurate credit score rating, along with a credit report breaking down your score calculations.
Here’s a breakdown of each category:
Payment History – 35%
Payment history lists information about the timeliness of your loan payments, such as credit cards, lines of credit, auto loans, student loans, mortgage loans, etc.
This category lists all your credit accounts, showing the types of loans you own (secured, unsecured, etc.), if your payments are late or missed, public records like bankruptcy, and the number of times payments were sent to collections. Payment history also indicates the number of times a credit company flags an account as delinquent.
Payment history is estimated to make up 35% of your credit score, making it the most critical category that impacts your overall score. Credit lenders evaluate this section to learn whether you are a trustworthy borrower or not. That’s why it’s crucial to make loan payments on time, as late payments will significantly impact your credit score.
According to Equifax, a late or missed payment sent to collection agencies and declared unpaid could stay on your credit report for approximately seven years (Equifax).
Credit Utilization – 30%
Credit utilization ratio measures the total debt you own across all accounts in ratio to the total amount of credit available. Credit utilization is then calculated by dividing your total debt by your total credit limit and multiplying it by 100 to come to a percentage. Ideally, your credit utilization percentage should remain at or below 30%.
|
Balance |
Limit |
Credit Utilization Ratio |
Credit Utilization Percentage | |
|
Card One |
$100 |
$1,000 |
100 : 1000 |
10% |
|
Card Two |
$1,000 |
$5,000 |
1,000 : 5,000 |
20% |
|
Card Three |
$6,500 |
$10,000 |
6,500 : 10,000 |
65% |
|
Overall |
$7,600 |
16,000 |
7,600 : 16,000 |
~ 48% |
The chart above shows that the overall credit utilization percentage is determined by the overall debt ratio to the credit limit, to give 48%, which is above 30%.
Credit utilization is estimated to make up 30% of your credit score and is the second-highest factor used to calculate your overall credit score. Creditors look at your credit utilization to determine how reliant you are on credit. Suppose you have a high credit utilization. It will suggest that you are an overspender and negatively impact your credit score. But, if you have a low credit utilization, lenders will see you as an attractive borrower and will grant you better interest loan rates. That’s why it’s beneficial to keep your debts low and credit availability high!
Credit History – 15%
Credit history lists all the credit accounts you own and how long they’ve existed, from your oldest to the most recent accounts. It’s good to have your oldest accounts active (as long as it’s in good standing) because creditors can see how responsible you are with managing your accounts over a long period. In contrast, it’s harder to evaluate your credit history with newer accounts. Credit history is estimated to make up 15% of your credit score. Still, this is a critical section to determine what kind of borrower you are.
Public Records – 10%
Public records list your account history, showing the number of times you’ve filed for bankruptcy or the number of times credit companies sent your payments to collections. Public records are estimated to make up 10% of your credit score, which is less than the other sections above. However, the information found on public records can stay on file for a long time. According to Equifax, bankruptcy can remain on a credit report for seven years (Equifax). Thus, this section can still impact your overall credit score.
Inquiries – 10%
Inquires indicate the types of requests filed to obtain your credit information by lenders and how many times. Two types of inquiries include hard inquiries and soft inquiries. Hard inquiries are filed by credit lenders after you apply for a new credit card. A hard inquiry may impact your credit score, especially if a credit company rejects your application because it indicates that you are in financial distress and need funds. Whereas a soft inquiry for a pre-approved loan offer won’t affect your credit score. Although inquiries are estimated to make up 10% of your credit score, consistently signing up for new credit cards and receiving a rejection will impact your overall credit score.
Written By: Indojaa Sathiyaseelan
