I get asked this question a lot: If you check my credit bureau does it affect my credit score? Short answer, maybe. Your credit score, or sometimes known as your “beacon”, can be affected by many things. Your credit score is created with a complicated, long-winded formula that isn’t shared by those who create it. This naturally leads to confusion about what goes into your score, so I will go over the main things to worry about when thinking about credit.
1. Payment History
This is the head honcho of having a good credit score. Maintaining a good payment history is the sure-fire way to build and keep your good credit score. This means always making your payments, even if you are just making the minimum payment for the time being.
2. Credit limits and balances
Just because you have a lot of credit does not mean that you will want to use it all. If you are always maxed out on your limit your credit score will decrease even if you do make all the minimum payments. Having your balances at no more than 75% is a good threshold to stay around so your credit score doesn’t take a big hit.
How long have you had credit? It takes some time to build a good credit history. Also, if you have credit and you don’t use it can affect you negatively. Lenders want to see a good amount of time with positive history as well as a good current history.
4. Credit Inquiries
This comes back to the question I get asked often. If you have a lot of inquiries for credit on your credit bureau this can be seen as a negative. Everyone is going to apply for some sort of credit every so often so as long it doesn’t get excessive you will be fine.
5. Bankruptcy, Consumer Proposal, Collections
These are the ones that will damage your credit history. All of these things will show up on your credit bureau and decrease your score. Most lenders will also want to see them cleaned up before they will issue you credit.