The process of credit repair can be difficult and take time, especially if you’re not sure about what is affecting your credit score. Familylending.ca offers private lending and bad credit mortgages that can help you rebuild your credit. Canadian credit bureaus calculate your credit score on a scale of 300 to 900, which lets lenders know what kind of a risk it is to lend money to you. Read on to learn about the five factors influencing your credit score.

Payment history (Determines 35% of your score)

You will be evaluated on how timely you are at paying your bills. How late you were, if a collecting agency had to be contacted, and if you’ve declared bankruptcy all play into your score. If you’re undergoing credit repair, it’s vital that you pay your bills on time to show lenders that you’re aspiring to be a responsible borrower.

Your dependency on credit (Determines 30% of your score)

If it looks like you rely heavily on credit as a way to pay for your lifestyle it will reflect poorly in your credit score. Aim to keep your credit card balance below 50% of the limit and make payments every month.

Borrowing history (Determines 15% of your score)

The length of time you’ve been borrowing impacts your credit score. Having had a credit card for years and paying them off will help your credit score. On the other hand, having credit and never using it won’t help your score.

Applying for new credit (Determines 10% of your score)

Don’t apply for multiple credit cards at once. When you do, every credit card company will be contacting the credit bureau for your credit history, which will reflect poorly on your credit.

The type of credit you’re using (Determines 10% of your score)

Using more credit doesn’t necessarily mean a better credit score. If you’re using credit to pay for everything from cash advances to car loans it could reflect poorly in your score. Creditors want to see that you will use credit but not that you depend on it.

As you can see, the five factors that determine your credit score are pretty evenly weighted. It’s important that you pay attention to all of the criteria if you’re rebuilding your credit or building credit for the first time.