What are the factors that make up your credit score?

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Below are some of the major factors that make up your Credit Score:

Number of Recent Inquiries

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When you authorize a company to investigate your credit for the purposes of obtaining a loan, they legally require a credit check, also known as a “hard hit”. If too many hard hits happen in a short amount of time they can directly impact your credit score. Getting your FREE Credit Score now will NOT count as an inquiry on your score. 

Overall Payment History

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Scoring systems tend to consider things such as the number of late payments, how much was paid, how long it took to return to good standing, and if you have defaulted. This is why it is extremely important to pay your bills on time and make your instalment payments each month. 

Total Debt Service Ratio

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Scoring Systems will look at your total debt service ratio (TDSR) which is your total outstanding debt and obligations compared to your income and ability to take on more obligations. 

Total Available Credit

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Scoring systems will also consider your total available credit today, even the portions which you are not currently using or lending against, but could at any time.

Credit Utilization

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This is a long-term historical summary and analysis of your total credit behaviour, which dates back to your first credit usage. This means that your score will be more accurate over time. Scoring systems will factor in many credit lines but the most common ones are Auto Loans, Credit Cards, Cell Phone Bills, Rent, Utilities.  

Delinquency

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Any late, missed, or outright defaulted payments will affect your credit score. Some lenders may offer a 30 day grace period before reporting the late payment to the credit bureau. Defaulted loans that have been transferred to collection agencies are damaging.

Mix Of Credit Products

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The scoring systems will consider your overall mix of credit sources. This means that having a car loan, mortgage, credit card, or line of credit in good standing will have a positive impact on your overall score.