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The distribution of the credit score (Equifax & TransUnion)

The attached table shows you how your score is affected by your behaviour and payment habits. For example, a late payment affects 35% of your consumer credit score. Using your credit, on the other hand, represents 30% of your score. For example, if you have three credit cards that exceed 75% of their limit, it can affect the 30% of your score. In other words, you can lose up to 75 points on your consumer credit score.

Account history refers to the age at which you have had a credit relationship with a creditor. The longer the account history, the better the effect on your credit score. That’s why it’s very important to keep your creditors long-standing. For example, if you have a score of 750 points, then 75 points represents the history. If your history is good and you have 750 points, in contrast, a recent credit report with the same credit instruments will show a score of 675.

The type of credit used refers to the ranking of the accounts, i.e. :

R – Revolving credit (credit card and line of credit)
I – Instalment account
C – Line of credit
O – Open account payable at maturity
M – Mortgage loan

Of course, the “R” rated accounts are the ones that get the most points when they are well paid and the ones that take the most points when they are paid late.

New applications, on the other hand, account for up to 10% of your score. For example, if you make more than 5 credit applications in a short period of time and you have 750 points, the resulting loss of points can represent up to 75 points. It is therefore very important to limit the number of credit applications.

The Canadian Credit Bureau can help you build your score quickly by helping you make corrections and updates to your file.

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