Is my credit score good? Understand credit scores in Canada.

 

 

Whether you need to apply for a credit card from a store to buy office furniture for your small business, or you are looking for capital to be able to make the biggest investment decision of your career, your score credit will help you determine your eligibility and that of your small or medium business.

What is a credit score?

What is a credit score?

A credit score is a 3-digit number that is derived from a mathematical formula that specifically indicates your loan and bill payment history. Two of the largest credit reporting agencies in Canada are: Equifax and TransUnion which use a scale ranging from 300 to 900.

What qualifies a good credit score?

What qualifies a good credit score?

The higher your credit score, the less risk you consider the lender to be, and the more likely you are to be approved for a small business loan and benefit from lower interest rates. For information :

  • 300 to 559: low credit score
  • 560 to 659: passable credit score
  • 660 to 724: good credit score
  • 725 to 759: very good credit score
  • 760 and +: excellent credit score

How do you determine your credit score?

How do you determine your credit score?

  • Your Credit Card Repayment History: Payment history includes keeping a balance on your credit card or if you have missed payments. The rule of thumb is to make your bill payments in full and not to reach your credit card limit.
  • Unpaid debts: be it a student loan, or unpaid lines of credit or credit card, any unpaid debt will affect your credit score.
  • The number of times you ask for your credit score: whether you believe it or not, your credit score will be affected each time you ask for it; so be careful to make sure you are up to date with the details of your report, but only do this once a year.
  • Your Credit History: Your credit history begins when you acquire credit and covers the entire period in which you have been in debt.
  • Any declaration of bankruptcy: if there is an archived bankruptcy, this will negatively affect your credit score since you will be considered as being a higher risk for the lender.

How to avail Loan for trainees?

Which requirements have to be met

Which requirements have to be met

Credit is credit and, by law, the borrower must be of legal age to borrow. In addition to the age of majority, creditworthiness and regular income are among the important conditions that must be met by the borrower. With a negative private credit bureau entry, apprentices do not have good cards in credit questions. The requirements for income vary depending on the loan offer.

For example, some providers only grant online credit to trainees if the apprenticeship has existed for several months, usually beyond the probationary period, others are satisfied with the fact that an apprenticeship contract exists and other providers explicitly set the minimum income level. In the event of creditworthiness problems as well as insufficient proof of income, collateral, guarantors or co-applicants can increase the chances of the loan approval.

Apprentice loan with third party guarantee

Apprentice loan with third party guarantee

If one of the important basic conditions for lending (secure income, income level, takeover guarantee, creditworthiness) does not exist, a guarantor can tip the scales. The guarantor is a person of full age who is legally competent in terms of jurisdiction. This can be a legal guardian, but also a relative or another person with whom the borrower has a special, trusting relationship. The guarantor undertakes, in the event that the borrower is unable or unable to repay his liabilities on time, to perform the service to the bank.

Specific trainee loans are characterized by tailored conditions. Direct banks in particular address various target groups with loan offers, which means that the terms and conditions for the special loan are based on the individual requirements of the target group. This includes the loan for trainees, which is also offered under this name. The conditions are tailored to the target group. The loan interest is much lower than, for example, a loan for employees or employees, the loan amount ranges between 2,000 and 5,000 USD and the term is limited to a few years.

Online loan portals for personal credit for personal credit

Online loan portals for personal credit for personal credit

Online loan agencies, where private lenders and borrowers meet, also create an incentive for trainee online loans. Portals like Auxmoney or Lendico are known and trustworthy. Loans with creditworthiness problems are also possible in principle, although it is ultimately up to private investors whether they realize a loan application or not.

The loan interest is determined according to the creditworthiness of the loan seeker. The human component counts very strongly on these credit marketplaces, which is why the online loan for apprentices is often also less bureaucratic and easier to obtain. The understanding of difficult life situations and the interest in help have a higher priority than the purely economic aspect.

Short-term credit / smallcredit for trainees

Short-term credit / microcredit for trainees

Smallcredit is characterized by its small loan amount, which can vary from 200 to 1,000 USD. They are also known as short-term loans if the repayment takes place within a few weeks or months. However, this is primarily an interim financing or a short-term bridging, ie the borrower should really be able to repay the money quickly. 

Tips to find the right online loan for apprentices

Tips to find the right online loan for apprentices

The low income and the uncertainty regarding a permanent position after the training and thus regular income should not be lost sight of with the online loan for trainees. Untrustworthy providers who advertise with large amounts of credit or loans with poor credit ratings only have their own financial interests in view and can be a way into the debt trap. So here are some tips on what loan seekers should look for in online loan comparison:

  • Favorable loan interest
  • Comparison of borrowing rate and effective annual interest rate
  • Total cost of the loan for trainees
  • Residual debt insurance yes / no
  • Short terms
  • Manageable loan amounts (small loan)

Deducting loan interest – what is and what is not?

The reasons for this may be complex, but a main reason for the Germans’ willingness to borrow is likely to be the current interest rate on loans, which is currently at a low. The German protection association for general credit protection – or short: Private credit checker – has certified a significant increase in loan financing in recent years. The majority of these loans are easily repaid by consumers, but many borrowers forget that they can also claim the corresponding loan interest for tax purposes. However, there are a few important things to consider that we have put together for the reader in a short article.

Conditions to be met

Which conditions have to be met with real estate loans in order to be able to deduct interest

Which conditions have to be met with real estate loans in order to be able to deduct interest

Loan interest that can be deducted from tax can be found primarily in the area of ​​real estate financing. The corresponding tax relief on the part of the declarant is also very useful here: if he makes an investment in a condominium, a single-family home or a new apartment or house, he can claim any loan interest while renting the property. In this case, the said loan interest can be entered as advertising costs in the Vuv form – or income from renting and leasing. Potential renovation or renovation projects for capital investments in the form of real estate that are rented out can also be made tax-deductible.

This basically includes all loans that are used to preserve the value or increase the value of the property and to continue to generate rental income. It is of central importance, however, that the relevant borrower only claims the respective loan interest, but no repayment installments. Furthermore, the declarant must prove to the responsible tax office that the loan in question has actually been used for the stated purposes – borrowers of real estate loans are therefore advised to maintain a separate real estate account to secure this requirement.

Tax deductible in other areas possible?

Tax deductible in other areas possible?

Moving loans can also be deducted from tax if certain conditions are met. If, for example, moving to another city or even a second home becomes necessary due to the pursuit of professional interests, and if a moving loan has to be taken out for this purpose, then its loan interest is also tax-deductible. The same also applies to loans that have to be taken out in order to pay a brokerage commission and to pay court and lawyer fees.

The self-employed and freelancers, who mainly use their vehicle for work, can also claim car loan interest for tax purposes. Loan interest for predominantly privately used vehicles cannot be deducted from the tax. Similar to the car loan, it is also the case for investment loans in professional training, such as student loans or loans for office equipment – here, too, the state enables the legislator to be tax deductible in the form of advertising costs.

Which loan interest

Which loan interest rates are in principle exempt from tax deductibility and according to which a distinction is made

Which loan interest rates are in principle exempt from tax deductibility and according to which a distinction is made

Especially in the private sector, it is not possible in many places to make interest tax deductible. This applies, for example, to loans for personal events such as weddings or private trips, as well as for personal loans. Nor can loan interest payable for the financing of privately used property be claimed for tax purposes. Even the popular overdraft facility with its generally very high overdraft interest is – in contrast to popular belief – in no way tax deductible. Because the legislator makes a fundamental distinction not according to the type of the corresponding loan, but according to the use of this for private or commercial purposes. If the respective loan is used for an investment purpose, the borrower’s loan interest can be calculated with tax deductibility.