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Credit Basics
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At Mercedes-Benz Financial, we base our assessment of all potential customers in large part on their credit score. The following section helps you understand credit basics.
Determining Your Credit Standing
Many people think that credit reports and credit scores are one and the same. In fact, a credit score is derived from the information contained in credit reports - and your credit score determines your credit standing.
When you hear the term "credit score," people are usually referring to your Beacon score - a scoring formula for assessing credit risk. Different retail and commercial organizations evaluate your "credit worthiness" using Beacon scores from the credit reporting bureaus, as well as some of their own scoring criteria. For example, while Mercedes-Benz Financial uses the services of the different credit reporting bureaus, we have our own formula to derive your credit "score" to determine whether you qualify for financing through Mercedes-Benz Financial.
Just as your credit history can be different when reported through different bureaus, your credit score can also differ at any point in time, since it is based on many different factors that include:
Your history of making scheduled payments
The amount of outstanding debt you have
The duration your credit history spans
The number of credit inquiries that have been made on your account and the type of inquiries made
The kinds of credit you have been awarded (bank cards vs. store-specific cards vs. loans, etc.)
If you want an accurate picture of the credit history that is being reported about you, you will need to request a copy of your credit history from each of the two major credit reporting bureaus. Remember, when you order a credit report it will not necessarily include your credit score. To find out your credit score, you will need to specifically request the "scoring option."
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Credit Reporting Agencies
The two major credit reporting bureaus in Canada are:
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