8:15 AM How Credit Scores Work in Canada | ||||
#credit score canada #Credit Scores in CanadaCredit Scores in Canada How Credit Scores Work Check Your Credit First Canada would like to point out that its important to know that the credit scoring system in Canada is very complex. Although a credit score plays a major role in determining if you qualify for a loan, it is not the only factor. Other factors involved in the credit decision process include the applicants employment situation, level of income, previous credit experience, location, type of loan and total debt service ratio. What are Credit Scores Used for For? In Canada a credit score is used by banks and finance companies to calculate risk and prophesize the credit performance of potential borrowers. In traditional lending circles, a credit score determines if someone will be approved for a loan and how big that loan can be. What is a FICO Score? FICO (Fair, Isaac and Co) is a public company that created the world’s most widely used credit scoring system: The FICO Score. FICO scores are used by many banks, credit bureaus and finance company across the world. How Does Credit Scoring Work? A credit score is a complex system used to predict the risk of loan default. The formula used to generate a FICO score is said to be closely guarded and unavailable to anyone outside of FICO. FICO will not release the exact method used to generate their score, however they have disclosed some general information: Credit Score Factors
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