What is Credit Score and Credit History
By definition, credit is established when someone lends some one else money. As you pay that money back over time your credit history builds up as well. Provided that you have good credit history, meaning that you paid back the money borrowed on time and in full, this establishes you a positive credit score. If you missed some payments or if you did not pay back the money you owed all, you will have established a lower, negative score (positive and negative scores can directly impact your ability to borrow in the future. The organizations that have loaned money will report your credit history along with your credit score to a Credit Bureau. We, in Canada have a few major Credit Bureaus, Equifax, Trans Union Canada, and Rent Check (see contact info below). Credit Bureaus will in turn create a file on your credit history and your credit score which will be available for future reference. Anytime a lender is considering giving you a loan, mortgage or even a service (such as mobile phone account) they will refer to your credit file (aka. credit report) to assess how risky it will be lending you money and how likely you are to repay it. The additional information included is your employment history and past information on where you lived since the beginning of your credit history as well as any court judgements against you. All information contained in the credit file/report can have negative or positive impact on how lenders perceive you, which will ultimately affect your ability to borrow. Considering that, nowadays, one of the ways to grow a business, buy a home, buy a car, get a cellphone etc is by borrowing, it is safe to say that Your Credit Score and your Credit Report are incredibly important from day one.