09 March 2012 ~ 0 Comments

Credit Records and Credit Scores: A Guide for Mississauga Renters

If you are hunting for a rental apartment in Mississauga, there is a chance that a prospective landlord may ask for a credit report and assessment of your credit score before leasing a Mississauga property to you.

credit records and credit scores - advice for rentersPeople quite often confuse a credit report and a credit score. They are actually two different things, although one is based on the other. The credit report is a factual account of your borrowing history. The credit score is a three digit number calculated from the credit report using an algorithm. Credit scores usually range from 300 to 850. A high score means you are credit worthy. A low score means you are high risk. Landlords in Mississauga and elsewhere vary in their requirements but most of them would want you to have a credit score above 600.

How is my credit score calculated?

Your credit score is usually based on the following criteria:

Make payments on time:  Your payment history, especially your record over the last six months, is a very important part of your credit score. If you have paid bills late, or been referred to a collection agency, this can have a bad effect. Worst of all is bankruptcy which can knock as much as 200 points off your score.

Outstanding debt: If the amount of debt you owe is close to your credit limit, this may also hurt your score. It is best to keep the ratio between your credit card balance and credit limit at around 20 per cent to 50 per cent. And it is better to have low balances on, say, three different cards rather than a large balance on one card.

Length of credit history: A short credit history may negatively affect your score.

Credit applications: If you have recently applied for lots of new credit accounts, it could lower your score.

Number of credit accounts: A variety of instalment loans and credit cards may to some extent improve your score. But too many finance company accounts or credit cards might negatively impact your score.

Have you any idea what is in your credit report? It is a good idea to check before you start your search for a rental apartment in Mississauga. There may be inaccuracies on your report and you should put these right as soon as you can.

In Canada there are two companies that can provide you with your credit report.

Trans Union: http://www.transunion.ca/

Equifax: http://www.consumer.equifax.ca/home/en_ca

If you apply online there will be a charge but if you apply to either of these companies by mail then you can get your credit score for free.


Image by: NobMouse

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