Credit FAQ’s

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Posted in Credit and Financing, Frequently Asked Questions, Uncategorized

𝗖𝗿𝗲𝗱𝗶𝘁 𝗤𝘂𝗲𝘀𝘁𝗶𝗼𝗻𝘀? 𝗩𝗜𝗗𝗿𝗶𝘃𝗲𝘀 𝗵𝗮𝘀 𝘆𝗼𝘂 𝗰𝗼𝘃𝗲𝗿𝗲𝗱!
𝗪𝗲 𝗵𝗮𝘃𝗲 𝗮𝗻𝘀𝘄𝗲𝗿𝘀 (𝗮𝗻𝗱 𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻𝘀) 𝘁𝗼 𝗲𝘃𝗲𝗿𝘆 𝗾𝘂𝗲𝘀𝘁𝗶𝗼𝗻 𝘆𝗼𝘂 𝗺𝗶𝗴𝗵𝘁 𝗵𝗮𝘃𝗲 𝗮𝗯𝗼𝘂𝘁 𝗰𝗿𝗲𝗱𝗶𝘁!

What is Credit?

Credit is the ability to borrow money or access goods or services with the understanding that you’ll pay later.

Lenders, merchants and service providers (known collectively as creditors) grant credit based on their confidence you can be trusted to pay back what you borrowed, along with any finance charges that may apply.

What does my credit score mean?

Creditors often use a three-digit number known as a credit score as the first step in deciding whether or not to issue credit.

Your credit score distills the information on your credit reports to something that’s easy to interpret, and does so in a fair way that minimizes the possibility of bias.

What is in my credit report?

Information in your credit report includes:

  • The number of credit card accounts you have, their borrowing limits and current outstanding balances
  • The amounts of any loans you’ve taken out and how much of them you’ve paid back
  • Monthly payments for your accounts were made on time, late or missed altogether
  • More severe financial setbacks (ie. mortgage foreclosures, car repossessions and bankruptcies)

Why do I need credit?

  • To borrow money for major purchases, such as a car or a home.
  • Landlords may check your credit when deciding if they’ll rent you an apartment.
  • Insurance companies may use your credit score as a factor in determining your premiums.
  • Utility companies may check your credit before deciding to let you open an account or borrow equipment.

How can I build my credit?

To start building credit you’ll need to get your first credit card, line of credit, or loan. Once you’ve done this.

  • always make your payments on time
  • make at least the minimum payment if you can’t pay the full amount that you owe
  • contact the lender right away if you think you’ll have trouble paying a bill
  • don’t skip a payment even if a bill is in dispute

For more information on how to build your credit- check out our post 5 ways to build your credit at home.

What if I have Bad Credit, or No Credit?

No problem! At VIDrives our goal is to get you approved to finance a vehicle at the best interest rate possible- Regardless of Credit Score.

We also offer credit rebuild and credit building programs as multistep programs.

Visit us at www.VIDrives.ca to learn more.