Do you have a good credit score? Excellent? Not so good? Have you checked recently? Today’s post is all about credit scores and car loans in Mississauga. They have a huge impact on how you live your life and even what kind of car you drive, so let’s dig into them a little.
We asked our Mississauga auto loans team to provide some insight into credit scores and car loans, what’s good, what’s excellent and why your credit score could be different from your friends.
What’s a good credit score?
A good credit score is one that sits within a certain range depending on the credit bureau you’re checking.
Canada has two credit bureaus, Experian and TransUnion and they both calculate credit scores differently. Experian scores range between 0-999 and TransUnion between 0-710.
A score that’s good for one won’t necessarily be good in another. So, the first piece of advice we’ll offer is to be aware of which is which and how they score.
Most scores will helpfully provide feedback such as ‘Good’ or ‘Excellent’ by your score so you know.
We have no preference between Experian and TransUnion but we have Experian data to hand, so we’ll use that.
According to Experian credit scores are divided thus:
- Very poor = 0 – 560
- Poor = 561 – 720
- Fair = 721 – 880
- Good = 881 – 960
- Excellent = 961 – 999
TransUnion does something similar but with different number ranges as theirs goes between 0 and 710 rather than up to 999.
Have you checked your credit score recently?
We generally recommend checking your credit score once every 6 months. You’re entitled to one free check per credit bureau per year, so that works out nicely.
If you have third-party financial products, identity theft products or other financial account that provides free credit report checks, you can use those too.
If you’re planning on getting a Mississauga car loan or want to borrow money anytime soon, you should check a couple of months before the time so you can fix anything that’s wrong.
Part of the reason to check your credit score is to check for errors. Mistakes happen and while the credit bureaus are careful, things do go wrong.
Why your credit score can be different from your friend’s
We get asked this question quite a lot. Two people with very similar life situations, earnings, career paths and financial profiles have different credit scores and often wonder why.
A credit score is made up of a lot of information including how much you use your credit card, whether you have missed a payment recently, financial links to bad borrowers, how old your credit accounts are and a whole lot more.
It’s rare that two people would have exactly the same credit score because there are so many variables.
Having one more or less credit card than the other can change the score. One person applying a loan off earlier than the other will do the same. As will one borrowing a little more on a car loan or mortgage.
Credit scores are a reflection of you as an individual handle credit and are worth putting some time into, especially if you’re planning to borrow.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!