You’ve likely heard about credit scores before (thanks to all those commercials with terrible jingles), but what do you actually know about them? How long have they been around? And why is it important to check them? Find out all this and more! About First Credit Union First Credit Union is the longest-running credit union in BC, incorporated in 1939. With five insurance branches, five credit union branches, $300 million in credit union assets, and $100 million in wealth management assets, the organization’s 140 employees serve over 38,000 members and clients across four coastal communities. http://www.firstcu.ca

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Breakdown of a
CREDIT SCORE

2. Before
CREDIT SCORES
• No standard for measuring risk
• Up to individual lenders to judge
loan applicants

3. What is a
CREDIT SCORE?

4. A credit score is a number used by financial
institutions and credit card companies
to determine risk level when issuing you
a loan or a credit card.

5. The FICO®
score is the most
widely used credit score
model in North America.
It was introduced in 1989
by Fair, Isaac and Company,
now Fair Isaac Corporation.
It’s also known as the
Beacon score in Canada.
FICO
Fair Isaac Corporation

6. EQUIFAX®
TRANSUNION®
Since each credit bureau uses
its own formula, your FICO
score can vary, depending
on which bureau supplies the
information.

7. What does my score
MEAN?

8. Most credit scores are between 350 and 800
350 800

9. LOW (<550)
A low score means you could be
denied a loan or a credit card
350 800

10. 350 800
MIDDLE (550 to 720)
You might get approved for a loan,
but at a higher interest rate

11. 350 800
PRIME (720+)
Loan approval at the best rates;
this is where you want your score to be

12. Why does my score
MATTER?

13. Car
Payments
Job
Applications
Renting an
Apartment
Student
Loans
Credit scores can influence:

14. How are credit scores
CALCULATED?

15. The breakdown of a credit score goes like this:
10%Mix of
Credit
35%Payment
History
30%Capacity
10%New
Credit
15%Length of
Credit

16. Making payments on time
boosts your score
PAYMENT HISTORY (35%)

17. • How much of your available
credit you actually use
• The less you use, the better
• Maxing out your lines of
credit harms your score
CAPACITY (30%)

18. A long history of good credit
habits raises your score
LENGTH OF CREDIT (15%)

19. • Opening a bunch of new
credit lines in a short amount
of time hurts your score
• This includes retail
credit cards
NEW CREDIT (10%)

20. • Revolving credit
(e.g., credit cards)
• Instalment loans
(e.g., mortgages, car loans)
MIX OF CREDIT (10%)

21. How do I keep track of
MY SCORE?

22. You can request one
free credit report
per year by mail from
Equifax and TransUnion
If you can’t wait for a free report by
mail, you can always get an instant
credit report online from Equifax or
TransUnion for approximately $15.

23. Space out your requests
by a few months so
you can check on your
credit year-round.

24. Things to look for on
your credit report
that influence your
credit score:
• Account openings
• Account closings
• Repayment history
• Mix of credit

25. Access through Equifax or TransUnion
for a fee (usually $20–$25)$$$
Need access to your credit score?
(You won’t find it on your credit report.)

26. Sources: FICO, Forbes, Financial Consumer Agency of Canada
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