Trillium Credit Intelligence Blog

Be informed about all things automotive financing with our complimentary Trillium Credit Intelligence Blog.

When it comes to credit ratings, the bottom line is that you have to look like you're a good risk to a potential lender. That means that you need to look stable, responsible, and like you are serious about taking care of your debts. One of the biggest issues for many people is stability. Changing jobs often or moving a lot tends to look bad on any credit application, whether you are buying a car or just trying to get a credit card. Look at a credit application as an audition; you have to put on your best costume and show them exactly why you're worth the risk.

The TDS ratio, which stands for the total debt service ratio, is expressed as a percentage of your gross income monthly divided by your total monthly debt service. For instance, if you have a gross monthly income of $7,000, monthly housing costs of $1,600, an auto loan payment of $400, and monthly credit card payments of $100, then you would divide the sum of your monthly payments at $2100 by your gross monthly income of $7,000 to wind up with a TDS ratio of 30%. The reason why this is important is because your TDS can greatly affect your ability to get loans, especially if you need a vehicle.

Maintaining good credit is essential to financial security, because it is a tangible way for potential lenders to assess how trustworthy and responsible an individual is. Even more than the sheer capital and available cash, good credit opens fiscal doorways for the consumer. Purchasing a car, a home, or any other significantly expensive product becomes much harder with bad credit, and ends up costing more because of the higher interest rates. After all, banks and lenders are taking a big risk by lending money to someone with bad credit, and the interest rates reflect this accordingly.

A person's credit score is a numerical expression of credit worthiness based on historical credit information contained in a report maintained by the major credit bureaus in Canada. The credit report consists of information reported to the major credit bureaus by lenders and credit card companies concerning your payment history on prior, and existing credit. The credit report will also contain information about your employment, assets, and public records such as court judgements and tax liens. A credit score determines if credit will be granted and how much it will cost (interest rates). In general, the higher the score the better. Higher credit scores allow for more credit/loan amounts being available to you, and at a lower cost (interest rate).

The power of having good credit cannot be overstated. With a positive financial report, an individual is able to secure a job, get loans for cars, homes and business endeavours  Many people can end up damaging their credit in one way or another without even knowing, and then later have regrets about the decisions they made in the past. Most business start ups require that the applicant have good personal credit history. If an individual is looking to start an establishment in the future, they should start by paying off any outstanding debts under their name. You should start by paying off the debt that has the highest interest rate to avoid paying more in the long run. Any credit offers should be turned down or dismissed at this point because these may affect your credit score.

In this day and age, everyone who has tried to buy any kind of asset or borrow money from any institution has heard about credit scores. So what really entails of a credit score? Although it has many definitions to it, in layman’s terms a credit score can be defined as the numerical representation of a person’s financial statistics. A credit score is basically what a lender will look at to determine whether a borrower is credit worthy or not. Although getting a good credit score is the aim of anyone who wants to get ahead in life, it may not always be possible especially with the current economic crisis happening all over the world.

Good credit will always give individuals more financial options than bad credit. Even though people can still get financing with bad credit, the choices are usually limited to strict payment plans with high interest rates. Having good credit, on the other hand, allows buyers to...

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