understanding equifax reports
understanding equifax reports

Understanding the Equifax Credit Score

Chances are you are familiar with words like “credit report” or “credit score”: whether you are applying for a bank loan, renting an apartment, buying a house or simply getting a new phone, the information in your credit report is critical. In a way, it is your consumer resume, whose data is held by the Equifax Canada or Trans-Union credit bureaus. It allows the lender to access all of your financial experiences and history in terms of loans and to determine if they wish to do business with you.

L’Ami Auto Crédit of the L’Ami Junior group in Chicoutimi, La Malbaie, Baie-Comeau, Alma and Sept-Iles doesn’t turn anyone away and offers you optimal auto financing. Improving your credit score: why and how? Here, the dealer group highlights how the credit rating works and how to improve it.

IMPROVING YOUR CREDIT SCORE: WHY AND HOW?

First of all, it is important to know that the credit score works a bit like a report card: as the professors of different courses write the grades obtained on the report card, which then form an overall average, each lender adds a grade to your file, which forms a rating, the credit score. The credit score varies between 300 and 900, with 300 being the worst possible credit score and 900 being the best. A score above 725 is generally considered very good, while below 660 is an average or even low score.

Although the report contains personal and civil information, finance companies are often the first to be thought of, and with good reason: loans and credit cards are indeed a gold mine of information for your creditors. Your repayment habits speak volumes, which is why this is the first step to improving your score. As you can imagine, paying off your monthly payments of your credit cards and paying your bills on time can only be beneficial.

But it’s not just a matter of paying back the card or making the minimum monthly payment, it is also a matter of avoiding exceeding a certain threshold of authorized credit usage. In fact, it’s best to refrain from reaching or exceeding the critical 50% threshold of your loan, the ideal being to stay around 30–35%.

A second wise advice to follow would be to avoid the multiplication of credit requests. Indeed, each time you make an application, and each time you are turned down for a loan, it adds to the information to which other lenders will have access, and this can only be detrimental.

Finally, you have to resist the accumulation of unnecessary financing, even if it is offered to you by your financial institution itself. The cleaner and more stable your file is, the better impression you will make as a borrower.

While it is true that a lower credit rating can put you at a disadvantage by having you turned down for a loan, a better rating doesn’t just help you get the loan: lenders who will be confident in your ability to pay will also have better offers for you.

In the case of a loan for a vehicle purchase, the most advantageous financing options with the lowest interest rates are often only available to impeccable consumers, while a lower rating means poorer offers.

L’Ami Auto Crédit: The Dealer That Understands You

If you have found yourself on this page, it is probably because you are looking to buy a car and have possibly encountered difficulties related to your credit file. L’Ami Auto Crédit is reaching out to you because they know that, despite a stormy credit history, you have the will to make up for it.

This is why no one is excluded with L’Ami Auto Crédit: whether you are looking for a new or used car, take advantage of our outstanding customer service and the sound advice and guidance of our team of automotive experts. Whether you are in debt, unemployed, recently divorced or have just arrived in Canada and do not have a credit file or history, the dealership group will offer you an advantageous financing rate and the opportunity to choose from a large selection of vehicles to your liking.

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