• Direct2Wheels

What is credit?

The moment we start making money transactions is the day our credit begins calculating. Yes, even before you get a loan of any type or a credit card, you have a credit score. We start with a low credit score rating because you have no financial history, so to speak. This is why first-time car buyers need a co-applicant, because the lender or bank has no way of knowing how credible the applicant is for their repayment plan.

Why care about your credit?

This hugely influential number is arguably the MOST important number in your life. The higher the number the more money you can borrow and the less you'll have to pay the bank to borrow it, aka your interest rate or the cost of borrowing. Your credit score is a tangible, measurable way for lenders to understand the likelihood of you repaying your loans and debt. So, how credible are you?

How is it calculated?

Credit scores are a 3-digit number calculated using information from your Credit Report. You get points for actions that demonstrate to your lenders that you can use credit responsibly. You lose points for things that show you have difficulty managing credit. In Canada, credit scores range from 300 to 900, the higher the better. The main factors used to calculate your credit score are

  • Payment history

  • Use of available credit

  • length of credit history

  • number of inquiries (lenders pulling your credit)

  • types of credit

What to do if your credit score is low?

Then it's time to take the first step and work towards rebuilding that credit score. We at Direct2Wheels are able to help our clients with all credit backgrounds including bankruptcy, repossessions, new to the country, divorce and everything in between. We help folks with bad credit move forward with a car loan designed to rebuild credit in a responsible way.

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