Credit history building

[wyho007]

If you care to build your credit history a lot, besides to pay your bills on time, keep a low spending %, etc as suggested on general web sites, the followings may be helpful (from own experience):

• Get a secured credit card (even though you can get an unsecured one)
• Get a credit card at the big 5 Canadian bank
• Have more than 1 credit card (2 secured ones or 1 secured the other not)

It took 6 months for me to get to a credit score of 740 using above technique when I had no credit history to start with in Canada.

Also, beware whatever accounts you open for anything financial related (credit card, mortgage, bank account, TFSA, investment account, etc), the institution will tend to run a hard inquiry on your credit file, try to limit that as much as possible. Even if it's at the same bank at the same day opening 1 bank account, 1 credit card, 1 investment account, your credit file will get hit 3 times (possibly)! Try to part the timing if at all possible, of course, go with it if unavoidable.

 

[APPNOV2014NY]

If you care to build your credit history a lot, besides to pay your bills on time, keep a low spending %, etc as suggested on general web sites, the followings may be helpful (from own experience):

• Get a secured credit card (even though you can get an unsecured one)
• Get a credit card at the big 5 Canadian bank
• Have more than 1 credit card (2 secured ones or 1 secured the other not)

It took 6 months for me to get to a credit score of 740 using above technique when I had no credit history to start with in Canada.

Also, beware whatever accounts you open for anything financial related (credit card, mortgage, bank account, TFSA, investment account, etc), the institution will tend to run a hard inquiry on your credit file, try to limit that as much as possible. Even if it's at the same bank at the same day opening 1 bank account, 1 credit card, 1 investment account, your credit file will get hit 3 times (possibly)! Try to part the timing if at all possible, of course, go with it if unavoidable.

Thanks for sharing. Honestly this sounds too good to be true. How did you find out that your score was 740? Which Credit Agency score did you use?

 

[pie_vancouver]

I am curious, so when these financial institutions check your credit standing, how much impact on the score? if you say 740, and then someone inquires, the score will be what?

 

[NetMecca]

Depends on the reason for the check and the type of check, soft checks (which is mostly for their information) do not have any affect. Hard checks (when you apply for a loan has some small affect (a few points generally). This is mostly designed to check on people that are suddenly applying for debt everywhere and multiple times. If you are just buying a car or apply for one loan, the affect should be minimal and for the most part no need to worry about it much at all.

Good luck

 

[DEEPCUR]

Thanks for sharing. Honestly this sounds too good to be true. How did you find out that your score was 740? Which Credit Agency score did you use?

It is not a big deal. My friend opened a credit card recently and TransUnion score was 713 to start with.

What mainly matters for getting good interest rate at least in US is length of the credit and any other similar type of past loans. Like for car loans, they check if you have any previous car loan and also how long one has had the credit.. I had 800+ score (not credit karma score, score from real credit pull by dealer), but still some banks (applied through dealer) rejected the auto loan due to insufficient credit length (around 4 years)

 

[APPNOV2014NY]

I had 800+ score (not credit karma score, score from real credit pull by dealer), but still some banks (applied through dealer) rejected the auto loan due to insufficient credit length (around 4 years)

Same thing happened to me after I had 3 years of credit history.

My Canadian Scotia account does not provide free Credit Score so providing few details from my USA discover account. USA discover shows that FICO uses following parameters to decide score:

Missed Payment ( 35%)

Consistently paying creditors on time is the most important factor in determining your credit score— even one missed payment can have an impact. That's why your payment history makes up about 35% of your FICO® Score.

Your FICO® Score considers:

• The number of accounts with missed payments over the last 7 years
• Amounts owed on delinquent accounts
• Collections and negative public record information

Revolving Utilization ( 30% )

Revolving utilization is one indicator of how much you owe on your accounts. The amount you owe lenders is one of the most important factors that impacts your credit and makes up about 30% of your FICO® Score.

Your revolving utilization is determined by:

• Your total balance owed on your revolving accounts
• Your total credit limit

Length of Credit ( 15% )

In general, the longer your credit history, the better. How long your accounts have been opened determines your length of credit history, which typically makes up 15% of your FICO® Score.

Your FICO® Score also considers:

• The age of your oldest credit account
• The age of your newest credit account
• The average age of all of your credit accounts

Inquiries ( 10% )

Lenders do a hard inquiry when you apply for a new credit card or loan. These inquiries are a good indicator of credit seeking activity, which makes up about 10% of your FICO® Score.

In general, you don't want too much credit seeking activity—or inquiries—in a short period of time.

Total Accounts ( 10%)

Creditors want to know you can responsibly manage a mix of credit types. That's why your credit mix makes up about 10% of your FICO® Score.

Your FICO® Score considers the types of credit being used and reported such as installment loans and revolving accounts.

 

[wyho007]

Thanks for sharing. Honestly this sounds too good to be true. How did you find out that your score was 740? Which Credit Agency score did you use?

I inquired my score from one of the free credit report sites, e.g. creditkarma.

 

[wyho007]

I am curious, so when these financial institutions check your credit standing, how much impact on the score? if you say 740, and then someone inquires, the score will be what?

I have no idea.