Area of Law: Credit, Debt and Bankruptcy
Answer Number: 0284
What is a credit score?Region: Ontario Answer Number: 0284
Equifax and TransUnion Canada, the two major credit reporting services in Canada, collect credit and debt information from banks, lenders, credit card companies, leasing firms, courts, and others. Credit bureaus do not report on your annual personal income, family income or how much you have in the bank — only your debt, available credit, and the public record (bankruptcies, court judgments, etc.). In Ontario, consumer credit reports are governed by the Consumer Reporting Act.
It is important to distinguish the difference between a credit report, a credit score and a credit rating.
Your credit score is a three-digit number calculated using a formula based on the information in your credit report. Your credit score will go down for activity that shows you have difficulty managing credit. Although important, when deciding if you are a good risk for a loan, lenders will also consider other factors along with your credit score, such as your income, type of employment and assets.
In Canada, credit scores range from 300 to 900 points, with 900 being the best score.
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