Your credit score and report is one of the most important things you have going for you.

If your hoping to buy the new iphone, a new home theatre system using credit your in store credit will be checked as you stand in line. You won’t walk out with the goods unless you check out .

Banks, employers, car dealers, insurance companies, retail credit lenders want to know what type of borrower you are before they will give you credit.

There are easy and free ways to keep up to date on your credit file.

There are two things two be aware of. One is your credit report the other is your credit score. Your credit report is a record of all your credit transactions including the past 60 days. It shows your outstanding loans, lines of credit, credit cards, credit limits and your payment history.

Your credit score is a number and it is determined by feeding all of the data from your credit report through a complex algorithm,

Your credit score immediately tells a lender what type of borrower you are and determines if you will get a loan or not and what type of loan. If you have poor credit you may still get a loan with a large deposit or down payment but you will have to pay a substantially higher rate than someone with good credit.

Credit Bureaus do occasionally make mistakes so It’s important to check on your credit score once a year. Both Trans Union and Equifax prepare credit reports in Canada. You may want to get one from each and make sure that they both have basically the same information.,

Your credit score is called your FICO or Beacon Score. If you have an R1 rating it means you pay your bills every 30 days as agreed. An R2 means you are a 60 day payer. You pay but you are often late. An R9 means a bad debt which the credit grantor wrote off because you defaulted on your commitment. R9 can also indicate a bankruptcy.

You are entitled to a Free copy of your credit report by mail each year.

To improve and build your score just create a history of paying your bills on time. Also have your credit limits raised on your cards if you can. Never borrow to your cards credit limit. Only ever borrow up to 80% of whats available on your card. When you go to or over your credit card limit this reduces your credit score. When you used just a small amount of your available credit this boosts your score.

Closing inactive cards will damage your credit and so will applying for too many cards at once. Never apply for more than 3 cards in one year.

If you want to buy a car or a home within a years time start working on your credit now. With one year of regular payments you can vastly improve a weak credit score and get in onto more solid ground. This will allow you to get a loan and pay less interest on it.