Articles

Immigration News

Credit Know The Score - How Canadian Credit Bureau Works!!


By Kuljit Singh




We know that most lenders pulls "Credit Bureau" generated by "Equifax" however RBC pulls Trans Union only. We thought you would like to know some information about Beacon Scores and their calculations that could possibly assist you when looking at you're clients' "Credit Bureau".


The following is an "at-a-glance" indicator that lenders use to estimate your probability of successful loan repayment (ever look at someone's bureau and see good trade lines currently but they end up having a low beacon score................below are the 5 different categories used to calculate beacon scores).



Beacon scores range from 300-900

*1) Type of Credit - 10% (credit cards, bank loans, etc.) Installment loans are better, then Bank R/C cards, then department store and finance company accounts.

2) Applications for new credit or credit inquiries - 10% - Only look back 6 months and any mortgage inquiries within a 14 day period only count as 1 hit.

3) Late payments, bankruptcies, collections and judgments - 35% - The more recent these items have occurred, the greater the impact.

4) Current Debts - 30% - This refers to utilization of credit limits. IE: Credit cards that have balances close OR over their limits will have a bigger impact.

5) How long accounts have been opened and established - 15% - The longer the history with trade lines...the better. So, when closing accounts after a consolidation, it is in the client’s best interest to leave open the older accounts and close the newer ones.

As you can see, #3 and #4 contribute to 65% of the beacon score so you should be able to get a fairly decent idea when looking at the Trans Union bureau what to expect.

FYI...Financial Institution’s can also put their own internal measurements to further break down the “Credit Bureau” even more and therefore, you sometimes get different beacon scores.

Kuljit Singh Janjua, AMP
President's Club Member 2005
The Mortgage Alliance Company of Canada
RightBroker™ - RightMortgage™ - RightPlace™
7025 Tomken Road, Suite 207
Mississauga, ON L5S 1R6
Tel: 416-473-SAVE (7283)
Fax: 416-987-5-987
Email: kuljit.janjua@rogers.com
Website: http://www.tmacc.com/kuljitsingh" rel="nofollow">LINK



 


Discuss this article
Article Rating is 4.5000 (Poor).
Rated by: 4 voters.
How do you find this article?
Excellent Good Average Poor Very Poor


You can also Submit an Article and help other community members. Thanks.

Similar Articles

Understanding your credit
Incurring debt is part of life for most people. Understanding how best to handle credit will help you maintain control of your overall financial situa..
Mortgage Challenges What Canadian Market Faces TODAY!
Enclosed please find a "brief synopsis" of mortgage challenges what Canadian Market is suffering these days in various market segments. Self-employ..
How to pay your bills and invest, too!
::::How to pay your bills and invest, too!:::: There’s no doubt about it, making ends meet is tough. And getting ahead?—well, for many Canadian..
Mortgage Basics
On 10th January, 2004 on a very cold Saturday afternoon a group of 25-30 Canadian Desi’s met in Toronto for the first ever meeting of Canadian Desi...
Buying a Home: What You Can Afford
Buying a Home: What You Can Afford If you're thinking of purchasing your first home, you probably have a lot of great ideas about what you'd like - ..
Buying a Home: What You Can Afford
If you're thinking of purchasing your first home, you probably have a lot of great ideas about what you'd like - such as several thousand square feet ..
Last-minute tax return tips that can add up to more tax-savings for yo
::::Last-minute tax return tips that can add up to more tax-savings for you:::: It's tax time! And while preparing your tax return is never fun, yo..
We Care India-Invest for Change
Samrudhi Microfin Society , a non profit with operations in Karnataka has launched an online P2P lending portal that connects social investors to its ..
Mortgage matters
Some simple hints for Home ownerships for Self Employed, Commissioned Sales Person, Seasonal Employees and Regular Incomes. Self-employed With unp..
Never say NO to any job. Every job is respectable.
Dear all, After reading couple of success stories here I thought I should share my experiences with u. I landed here in 2002 summer. My husband was..
New Students - Opening a bank account
Q1. I came to Canada on a student visa and I need to open a bank account, which bank should I go to? I will try to answer this fair question by l..
CANADIAN GOVT. IMPOSES ADJUSTMENTS TO LENDING...
Ottawa, July 9, 2008 2008-051 Government of Canada Moves to Protect, Strengthen Canadian Housing Market The Government of Canada today announce..
Immigration 101: How to Succeed in Canada?
A.Who should immigrate to Canada?. We keep reading the very same questions repeatedly in regards to job opportunities in Canada. The dichotomy o..
How can I spend for tomorrow's spending when I cannot keep up with pay
How can I spend for tomorrow's spending when I cannot keep up with paying for yesterday's? Part 1 There is hope yet. This article is for some..
Our landing Experience
We (myself, wife and 4 yr old son) landed in Toronto's Pearson Airport on 7th June'05.We had planned to stay in Canada for two weeks and go back to Ku..

Articles Groups

  • Canadian Immigration & Citizenship
  • My Experiences with Canada
  • About Canada
  • Tips for job findings
  • Housing and Mortgages
  • Money Matters
  • Tips for newcomers to Canada
  • RESP & Insurances
  • Education in Canada
  • Miscellaneous


  • Share:
















    Advertise Contact Us Privacy Policy and Terms of Usage FAQ
    Canadian Desi
    © 2001 Marg eSolutions


    Site designed, developed and maintained by Marg eSolutions Inc.