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Credit rating - how are you rated?

Your credit rating is your history of repaying loans, credit cards or other financial obligations. It assesses your track record, how much you currently owe, what your payment amounts are, and gives you an overall score. Before you apply for a business loan, it's a good idea to check your credit report and continue to do this periodically.

What is a credit score?

A credit score is a snapshot of your credit picture at a particular point in time. It is an indicator of the risk level that you, as borrower, might represent, and is used to predict future performance. Your credit score will change as information is added, altered, or removed from the credit report.

What affects your credit score?

How much you are paying on your accounts and how long your accounts have been open.

How much you currently owe.

What different types of credit you use and how often and recent you have applied for credit.

How much credit you use compared to the amount available to you.

Who can access your credit file?

A company may only obtain your credit file with your consent, after having told you it may be requesting it. A company must have legitimate business reasons for wanting to access your credit file.

What you can do to maintain a good credit rating?

Request a copy of your credit file from the credit-reporting agencies. You can get a copy of your credit report and ‘score' from agencies in Canada such as: Equifax and TransUnion.

Make a habit of checking your credit periodically, adding comments or having inaccuracies corrected. Remember you have the right to dispute any misinformation on your credit report.

Only responsible credit practices over time can repair credit history.

Protect yourself from fraud.

Use your good record to promote your business.

Your credit history is established by you and there are no shortcuts to erasing bad credit records. As a small business owner it is important to understand, build, monitor, protect and control the information in your credit file.

CFIB is Canada's largest association of small- and medium-sized businesses. Encouraging the development of good public policy at the federal, provincial and municipal levels, CFIB represents more than 105,000 business owners (4,500 of whom are located in New Brunswick) who collectively employ 1.25 million Canadians and account for $75 billion in GDP.