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Understanding Your Credit Report
About Credit Report/Credit File:
Along with the credit histories of millions of other people, your credit history is recorded in files maintained by at least one of Canada's major credit-reporting agencies: Equifax Canada and TransUnion Canada - it is possible to obtain your credit file for free - please consult the agency's website in order to obtain more information.
These files are called credit reports. A credit report is a "snapshot" of your credit history. It is one of the main tools lenders use to decide whether or not to give you credit.
Your credit file is created when you first borrow money or apply for credit. On a regular basis, companies that lend money or issue credit cards to you - including banks, finance companies, credit unions, retailers - send specific factual information related to the financial transactions they have with you to credit reporting agencies. Along with your credit there is your credit score or beacon score, the higher your credit score is the better it is for you to get credit.
How Credit Scores Are Formulated:
Payment History - 35%:
Factors in the recency of, and number of, payments over 30 days late, collections, judgments, and bankruptcies. A single 30-day late payment can drop your score 15-20 points.
Current Debts - 30%:
Considers how much you currently owe (in absolute terms and compared with your credit limits), how many creditors you owe money to, and how much you could owe if you maxed all your available credit.
Age of Accounts -15%:
The longer your accounts have been opened the better. You generally need at least two accounts over one year old.
Type of Credit- 10%:
Bank loans, credit cards, and revolving credit accounts all impact you differently.
Credit Enquiries - 10%:
Numerous credit applications in the past 12 months is a no-no! This is a big benefit of having a Mortgage Broker, who pull your credit only once for multiple lenders.
Besides the obvious (Bankruptcies, judgments, collections, etc.) the top Beacon killers are:
If you have a lot of maxed out cards, bring them at least below 50% of the limit (below 30% is best). Your credit score can jump considerably in as little as a month. | 
