Credit scores, their extremely important

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Your credit report and credit score is very important and it’s crucial that you check them periodically so that you know where you stand according to them, and to prevent or detect identity theft.

Credit scores
Your credit score is a number between 300 and 900 (in Canada) that indicates whether or not you are credit worthy. The number you “earn” is determined by your credit history and since history is ever-changing, your score will likely vary at least a little from time to time. Your credit history portrays whether or not you’ve paid bills on-time, whether or not you’ve gone over your limit on credit cards, etc. On the scale, 300 is a very low (not good) score, and 900 is perfect (the best). Ideally, you want your score to be as close to 900 as possible so you can (1) get a loan if you need one (e.g., car loan, mortgage, etc.) and (2) get the best (lowest) interest rate on that loan. Your credit score is also something that landlords will check, so it could even affect whether or not you can live in the rental property of your choice! So you see, it’s incredibly important to establish and maintain good credit.

Credit reports
Your credit report details the facts of your credit history. So, for instance, if you’ve missed payments or gone over your credit limit, those details will be documented on the report. When you apply for credit (credit card or any type of loan), the lender you’re applying with will pull your credit report from a credit reporting agency. The agency receives and collects information from retailers, credit card companies, banks, and credit unions about whether you’ve been a good borrower by paying on-time, etc. This detailed information goes into your credit report. Like your credit score, your credit report can be obtained by lenders, employers, and landlords when you apply for a loan or credit card, a job, or housing. And don’t think these people in power won’t pull your credit report or score—most any time you apply for credit, a job, or housing, they will!
The good news is you can request a FREE copy of your credit report each year to see what it says about you. Be sure to do this at least once per year (2–3 times per year is even better to keep a watch on it).

Remember to check your score for errors, believe it or not but this is quite common.

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