What Is a Beacon Score?

The biggest part of the score (35 per cent) is your payment history, This shows if you pay bills on time, have any unpaid debts or have been through bankruptcies, consumer proposals or debt management plans.

Another big part (30 per cent) is based on how much you owe.

If you carry an $8,000 balance on a credit card with a $10,000 limit – even if you pay the minimum on time each month – your credit score will drop. So, it pays to keep your balances down and not get close to your credit limits.

Another 15 per cent of your credit score is based on how long your accounts have been open and used. You may be a newcomer to Canada with no record of loans or someone whose spouse takes care of all credit transactions.

To be seen as a good credit risk, it’s not enough to be approved for credit. You have to use the credit you’re given.

Another 10 per cent of your credit score depends on the balance between revolving credit (such as credit cards) and instalment loans (such as mortgages or car loans).

Lenders like to see both types of credit. Revolving credit can be maxed out since the rates are high enough to absorb losses, while instalment loans with fixed payments must be approved and supervised closely.

The remaining 10 per cent of your score is based on how much new credit you’ve obtained or applied for. This shouldn’t be too high a percentage of all the credit shown on your file.

Hope this comes to you as a little tip and is information you can use.