A credit score can be defined as a specific number that is assigned to someone depending on their specific creditworthiness within a given time. This score is determined using someone’s credit report which is a history report of how that person has managed his or her previous and current credit requirements. Your credit score expresses how likely you are to repay any new money that you borrow today based on past debt settlement practices.
This is an organization that receives and offers credit information about people and businesses. In Canada, there are two different types of credit bureaus: TransUnion Canada and Equifax Canada. Apart from providing credit reports each of these two companies is on a system for determining credit scores forgotten by businesses and individuals. Therefore, the moment you borrow money from any lender in Canada the chances are that you will become a customer for one of the credit bureau companies in Canada.
Though it’s not a requirement for you to know your own credit score, experts advise that it’s important to know your credit report. This is because the report outlines your past and current credit accounts and you should check this report at least once a year for inconsistencies, inaccuracies, and potential fraud practices. Despite the fact that most people don’t need to know their credit scores, recently, many people have been curious about their entire credit report and credit scoring process. With that, over the past few years, most companies that provide free credit scores have been capitalizing on this increased demand.
Note that free credit scores are given by any company that can access enough personal financial information from consumers. Such companies tend to build their credit scoring process. Since your credit score might be calculated by different companies, then chances are that you might end up having more than one credit score. Even your credit score as determined by TransUnion might be different from that determined by Equifax.
Keep in mind that companies that offer free credit score services also offer other products and services. As the company gathers your financial information to determine the credit score for you, they tend to encourage you to subscribe to some of their services. Such services may include insurance against identity theft, credit monitoring, and more.
Since you must subscribe to the company’s products for you to get your credit score, the service isn’t free at all. However, not all companies that provide credit scores use this strategy. Therefore, it’s wise to read the fine print before you subscribe for anything. Though the free service can be legit, there might be a steep price to pay.
Note that any other credit score you get from any other company apart from the credit bureau is an approximate. Is it important? This score is essential as it can indicated what you may need to enhance or get more information about. Besides, based on your approximated credit score, companies can offer you insights on how to make your score better. It’s also important when it comes to determining whether you can opt for debt consolidation Toronto.