How Are Credit Scores Calculated In Canada Have you ever wondered how credit scores are calculated? Many people are still in doubt about the factors that affect credit scores. Credit scores are calculated by the previous records of the loan payments. Your credit scores will get affected if you have missed repaying the loan on the date allotted. A credit score is a three-digit number that carries the information of your credit report. Credit scores help the moneylenders to have a view of your previous loan payments. On having a preview the moneylenders decide whether to lend money or not for the borrower. Typically a lender will not offer money if the borrower doesn’t have a solid credit score. The higher your credit score you get loans at a lower rate of interest. DFCS helps in such situations as it provides consumer proposal in Toronto.
How is credit score calculated? Credit scores are calculated by five factors. ● 35 percent of your credit score is calculated based on your loan payment histories. This is because the creditors need to know how you handle loan payments. ● 30 percent is calculated on the total amount you have owed. This factor is main for the lender, as how much money you have owed, and this shows how you are going to pay the money you currently owe. ● 15 percent is based on when you have used your credit for a long time. The longer you use the credit responsibly improves your credit score.