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Credit Scores Vs. Credit Reports: Key Differences That Business Owners Should Know

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Do you make a clear distinction between a credit report and a credit score? It’s easy to mistake these two connected things for the same.

Key Upshots

  • Your credit report is a chronicle of your indebtedness. It features your personally identifiable information including a record of your past and present obligations. It also indicates if you have always paid your debts on time or if you have ever missed a payment.
  • Your credit score is a 3 number figure calculated using information from your credit report. The greater your score, the more enticing you are to lenders. A lower figure may reflect negatively on your credit situation.
  • Your credit score does not ensure that you will be approved or denied for credit. Individual credit issuers often evaluate you based on their criteria, which may include your previous contact with them.                                                                                        

If you pay attention, you will see numerous significant differences between the two. We highlight how your credit score and credit report differ and how they interact to give a picture of your financial health. While the terms credit score and credit report are frequently used alike, they are not synonymous. Credit scores and credit reports are both dependent on how effectively you’ve managed credit in the past, but there are some key differences to be cognizant of.

What is a Credit Report, precisely?

A credit report comprises information on your observed in previous and present credit agreements, such as credit card accounts, mortgages, and student loans, as well as credit history checks. It reveals how much you owe creditors, how long every account has been open, and how often you make on-time repayments. Credit reports also include information from public records such as receivables or bad debts. Having secured credit cards Canada and making repayments on time have positive impacts on your credit history.

(Image Source: Freepik)

Parts of a Credit Report

Your credit report is divided into three sections:

  1. Information about you

This section includes the following items:

Since credit bureaus use your address to match up all of your credit history, it is critical. As an outcome, it is vital that you register all of your bank accounts at a single location. Notify your lenders as soon as possible if you migrate so that they can update your information. This guarantees that your credit report is complete and correct.

2.History of credit accounts

This is a list of your credit and current accounts (for example, a credit card or a bank account). You will indeed be capable to see how much liabilities you currently have (your balance). This section will display your current accounts (which will have a £0 amount unless you have an overdraft), secured credit cards, short-term loans, and long-term debts, such as a mortgage.

(Image Source: Pixabay)

It may, however, include less apparent information, such as accounts with energy providers, internet service providers (ISPs), and mobile phone networks. If you use secured credit cards Canada, then it may help you in maintaining a great credit history.

In a formal sense, these are also credit accounts. You are receiving a service today and will be charged later. It is up to the individual supplier whether they will appear on your credit record. Not all service providers provide reports to credit bureaus.

  1. History of Payment

Your credit report will indicate if you have paid your obligations on time each month, whether you have made late payments, or if you have skipped any payments completely. At the risk of repeating myself, paying your obligations on time is a good thing. Missed payments reflect poorly on you.

What Is The Protocol For Obtaining A Copy Of Credit Report?

Every year, you are eligible for a free copy of each of your credit reports; you may get them through the government-approved website AnnualCreditReport.com

Monitoring your credit reports might help youdiscover what lenders will look for when you apply for a loan.

     IMPORTANT

Do you still need a clarification of what a credit report is? Well you have it now!

A credit report is a record of all your obligations including repayments and installments from secured credit cards Canada. It’s similar to a curriculum vitae or a school report. Only this time, instead of information about your prior work or academic achievement, it includes information on how you borrowed and repaid money.

The majority of the information in your report is provided by lenders. Credit reference agencies, which generate credit reports, compile this information.

What precisely is a Credit Score?

A credit score is akin to a test score issued to your credit report. This three-digit figure, which is based on the conventional FICO® Score, generally runs from 300 to 850. Equifax®, Experian®, and TransUnion® are the three credit reporting companies that issue you a credit score. It includes you credit behaviours from unsecured or secured credit cards Canada.

(Image Source: Freepik)

When you seek your credit score, you will receive three numbers in response, which may all be different because the figures come from various reporting agencies. When you obtain your free yearly credit report, your credit score will not be included.

Your credit score is a three-digit figure that is calculated based on the financial history contained in your credit report. Monitor your credit report to ensure it is up to date and correct in order to safeguard your credit score.  

 PRO TIP

Each credit bureau will charge you a fee to see your credit score. If some of your credit scores change drastically from the others after getting them from all three agencies, you should carefully check your credit report to determine if there are any inaccuracies that you may dispute. A high credit score indicates a lesser likelihood of financial distress, and clients with a high credit score are much more likely to qualify for a loan.

Still not sure what is a credit score? Here is a simple explanation.

If your credit report was a report card, your credit score would be your total grade. In all other terms, it measures the likelihood that you will be sanctioned for credit based on the information in your credit report, as well as the attractiveness of your credit conditions.

So, What Exactly Constitutes A “Fair” Credit Score?

Normally, the higher your score, the better. A decent credit score shows moneylenders that you are more responsible, and hence more ‘technically qualified.’ This is data from report of Equifax, which assigns the following scores:

Very poor0 to 278
Poor279 to 366
Fair367 to 419
Good420 to 466
Excellent467 and Above

Credit reference agencies have varying maximum scores as well. Experian has a score of 999, Equifax has a score of 700, and Callcredit has a score of 710. They also come in many different scales. Your credit score may be 459 with Equifax, 999 with Experian, and 609 with Callcredit based on the same information.

And here is a more in-depth look at credit ratings, how they’re calculated, and what factors may affect your score.

How Can I Determine My Credit Score?

You may call the credit reporting bureaus to obtain your credit score for a charge. There are many websites where you may get a free Vantage Score. A Vantage Score and a FICO® Credit Score are not quite the same thing, as they are derived uniquely. Some banks and credit card firms offer credit ratings to qualified clients. You can make responsible choices about your financial future by knowing your credit report and credit score and verifying them for accuracy on a regular basis.

(Image Source: Freepik)

What Is The Distinction Between A Credit Score And A Credit Report, And How Are They Connected?

Your credit report is a thorough record of all your financial transactions. A credit score is a number generated by credit bureaus and lenders that outlines the details in a credit report.

“According to the FTC (Federal Trade Commission), one out of every five consumers discovers a mistake on their credit report. These mistakes have an impact on your credit score and ability to apply for loans, leases, credit cards, and other services.”

Your credit report indicates how you’ve historically handled unsecured and secured credit cards Canada. When credit companies look at your report, they can answer crucial questions about your financial habits, such as:

  • How much debt do you already have?
  • Do you pay down the bills in a timely manner?
  • Do you have a tendency of taking out loans than you can handle?

These and other considerations assist credit lenders in making decisions:

  • If to give you credit what so ever
  • On what conditions to give you credit (specifically, what interest rate and repayment plan they will offer you).

When you look at all of the information in your credit report, it’s difficult to predict how a lender would take it. Your score combines all of the information in your report into a single number. This allows you to assess how you’re performing in relation to what lenders are searching for.

But here’s a word to the savvy.

Your credit record isn’t the only information a creditor will consider when making a decision. The information you offer in your application, their previous interactions with you, and other criteria such as your income are all significant.

Different suppliers also have their credit ratings. So, while a high Experian, Equifax, or CallCredit score is not a guarantee of credit, it is a good sign. Similarly, just because one supplier turned you down does not guarantee that others will follow suit. If you want to have another layer of cushion, then having secured credit cards Canada can be of great help.

Key Differences between Credit Report and Credit Score

Credit ReportCredit Score
A thorough text-based report containing personal information, employment information, public records, accounts under collection, payment history, and other information like outstanding balances, Age of credit accounts, New credit accounts, assortment of credit kinds.A comprehensive score demonstrating your overall solvency based on the information in your credit report.
Experian, Equifax, and TransUnion credit bureau data are often used to create this report.Can only be computed using information from a credit report.
Creditworthiness is determined based on the specifics of your present financial commitments and credit history, including any prior negative marks.Creditworthiness is determined by five weighted factors: Payment history, amounts owing, duration of credit history, credit mix, and current activity are all factors to consider.
Can be obtained directly from credit bureaus or via AnnualCreditReport.com.  Credit reports are available through a credit agency, your banker, your credit card issuer, or a credit consultant.
It is used by bankers, creditors, debt collectors, insurance providers, utility providers, employers, and property owners. It is used by bankers, creditors, debt collectors, insurance providers, utility providers, and tenants. Employers cannot inspect your credit score created by FCRA.

Why Does This Make Any Difference?

Comprehending the functions and roles of your credit score and credit report might be crucial to your economic well-being.

Inspect your free credit report and FICO score at least once every year. Pay close attention to credit report habits that are strongly weighted against your credit score. Investigate everything that appears to be out of the ordinary. Plan ahead of time since it might make the difference between permission and denial.

Frequently Asked Questions

  1. Is a good credit score more essential than a good credit report?

They are distinct, yet they are related since the score is generated from the report. Creditors can use either to decide to choose whether or not extend credit to you. Your credit score is vital, but you still need your credit reports if you want to dig deeper and assess your credit history.

  1. Which credit report is the most reliable?

Since FICO scores are employed in more than 90% of loan decisions, the FICO® Basic, Advanced, and Premier services are the most accurate for credit score updates. All services include access to 28 different versions of your FICO score, including credit card, mortgage, and auto loan scores.

  1. How can I raise my credit score swiftly?

The most significant actions you can take to improve your credit are to pay your bills on time and to pay off your credit card balances. Every 30 days, issuers record your payment activity to the credit bureaus, so taking good measures might boost your score rapidly.

Investment

Camarico Launched Camarico Financial Corporation and Pilot Investment Program – TheNewswire.ca

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July 29, 2021 – TheNewswire – Camarico Investment Group Ltd. (CSE:CIG) (CNSX:CIG.CN) (“Company”) is pleased to announce the restructuring and relaunch of Maverick Northstar Inc as Camarico Financial Corporation (“CFC”). CFC will lead Camarico Investment Groups non-equity-based investment strategies.

 

CFC has received a non-interest-bearing loan from Camarico Investment Group for the sum of $200,000 CAD to initiate CFC’s proprietary Pilot Program, Reserve Capital and G&A. CFC will place Reserve Capital in Collateralized Short Term Demand Notes with qualified third parties.

 

CFC will provide monthly updates on Pilot Program performance and findings.

 

Camarico Financial Corporation is not a licensed financial service provider and WILL NOT sell financial products, such as: mutual funds, insurance, securities or stocks, options, futures, OR have specific duties within a financial services company, such as portfolio management or supervisory responsibilities.

 

ON BEHALF OF THE BOARD OF DIRECTORS OF CAMARICO INVESTMENT GROUP LTD.

“R. Mackenzie Loree”

Chief Executive Officer

Email: mloree@camarico.ca

 

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the CSE) accepts responsibility for the adequacy or accuracy of this press release.

 

Forward-Looking Information: This press release may include forward-looking information within the meaning of Canadian securities legislation, concerning the business of the Company. Forward-looking information is based on certain key expectations and assumptions made by the management of the Company. Although the Company believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Company can give no assurance that they will prove to be correct. Forward-looking statements contained in this press release are made as of the date of this press release. The Company disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information contained in this news release.

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The 5 Worst Investment Tips on TikTok – Entrepreneur

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July
29, 2021

6 min read


This story originally appeared on NerdWallet

This article provides information for educational purposes. NerdWallet does not offer advisory or brokerage services, nor does it recommend specific investments, including stocks, securities or cryptocurrencies.

Do-it-yourself is fine when the stakes are low; everything you need to know about patching drywall is on TikTok. But what about when the stakes are high? Would you rewire your home after watching a few TikTok videos? Probably not, and the same logic goes for financial advice.

Pouring your savings into an investment — or any product — being hawked on social media is generally a bad idea. But how will you know which bits of advice are legitimate, and which are bunk? Below, experts weigh in on the worst investment advice they’ve seen recently on TikTok and other social media.

1. The FIRE movement is for everyone

FIRE stands for “financial independence, retire early,” and given how the movement has spread on social media, the acronym is apt. Chris Woods, a certified financial planner and founder of LifePoint Financial Group in Alexandria, Virginia, says that many of the core tenets of the FIRE movement are great: They focus on lowering your expenses, saving heavily, putting money into diversified index funds and generating multiple streams of income to help you retire early, which may all be sound financial decisions.

The problem is, everyone’s financial situation is different. Financial planners spend a lot of time upfront learning as much as they can about someone’s unique financial standing before making any recommendations. And for some, he says, the FIRE movement may be an appropriate goal. But it’s not for everyone, and sound bites from social media influencers can’t take your personal situation into consideration.

“So many people will do what these influencers are saying, even if it’s not the appropriate thing for them,” Woods says. “That’s one of my big overarching disappointments or gripes with the influencers out there. Because a lot of times, they’re talking about this stuff without context.”

The next time you see someone living their best #vanlife and boasting how they retired at 30, remember you’re seeing a highlight reel, Woods says. Their financial situation may have been completely different from yours, and there’s no guarantee what worked for them is right for you.

2. Forget about 401(k)s and IRAs

There’s a thought out there that boring, long-established wealth-building strategies, such as funding retirement accounts like 401(k)s and IRAs, are outdated.

“This is all so faulty and so bad I don’t know where to start,” says Tiffany Kent, a CFP and portfolio manager at Wealth Engagement LLC in Atlanta.

Kent says that to stand out on social media, someone can’t just talk about typical retirement accounts over and over again, no matter how proven they are. Boring doesn’t inspire viewers to smash that “like” button.

Instead, they talk up new, complicated — and at times confusing — products, simply to stand out from the crowd. Sometimes the ideas are a bit contrarian, other times they’re outright outlandish. But this approach, Kent says, is absolutely the wrong way to get financial advice.

“If it’s boring, it’s good,” Kent says.

3. Precious metals are the best long-term play

Gene McManus, a CFP, certified public accountant and managing partner at AP Wealth Management in Augusta, Georgia, said by email that he’s seen claims that precious metals IRAs (which invest in gold and silver instead of stocks and bonds) are a better choice than typical IRAs.

He said acolytes of the strategy argue that precious metals IRAs better protect your money from things like inflation, global supply shortages or a collapse of the financial markets.

But McManus disagrees.

“The long-term history and performance of gold and silver do not indicate that they are a rewarding asset class,” he said. “There are short-term periods that they might outperform the S&P 500, but over the long term, they don’t make sense to own, especially exclusively or overweight in a portfolio.”

4. Hundreds of thousands of people can’t be wrong

It’s true that there’s power in numbers. However, it’s equally fair to say that mob mentality, echo chambers and hype can get in the way of rational decision making. Anthony Trias, a CFP and principal at Stonebridge Financial Group in San Rafael, California, says he’s worked with clients who are investing in stocks they’ve heard mentioned on social media — no matter how staggering the claims of future potential — because of how many people were talking them up.

“There are going to be 300,000 people on social media saying one thing,” Trias says. “But prudent investors block out the noise, do their due diligence and look at who they’re actually listening to.”

Trias also echoes Woods’ concerns. Validating investment ideas based on social media hype is problematic, he says, because investment decisions should be highly tailored to you and your needs — and that’s just not possible on social media.

5. Your cryptocurrency will absolutely go to the moon

All the rocket emoji in the world couldn’t give a valueless cryptocurrency long-term staying power, no matter who’s pumping it.

Clayton Moore, founder and CEO at crypto-payment system NetCents Technology, said by email that while engaging platforms like TikTok have been instrumental in spreading the word about cryptocurrencies, they’ve also become breeding grounds for fraud.

“You’ve got to watch out for the crypto influencer who’s just in it for a quick buck,” he said. “The classic pump and dump.”

Moore said it’s common for crypto influencers to accept payment in exchange for making wild claims about a coin, only to abandon their support for it once the check clears.

“If it is too good to be true, 99% of the time, it is,” Moore said.

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CPP Investments appoints new head of private equity – Investment Executive

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Former Google CFO joins Wealthsimple’s board

Patrick Pichette is a partner with Inovia Capital, which participated in Wealthsimple’s latest fundraising round

  • By: IE Staff
  • July 27, 2021
    July 27, 2021
  • 11:13

Bank of Canada names new deputy governor

Sharon Kozicki will take on the role on Aug. 2

Mark Carney says climate commitments preclude running for Liberals in fall election

The former governor of the Bank of Canada and the Bank of England said he’s focused on the UN climate conference

SLC Management appoints global head of ESG

Anna Murray will oversee ESG investment strategies for the firm’s institutional clients

  • By: IE Staff
  • July 20, 2021
    July 20, 2021
  • 11:37

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