Do you still have those dreams where you’re in school and you’ve missed or made a huge mistake on an important test.

Sorry to make you anxious, but you’re actually still being tested, possibly without you realizing it. Every time you borrow money, use your credit card or pay a bill, you’re being evaluated by Canada’s financial system.

Your grade is your credit score.

And every time you apply for a loan or a credit card, the financial institution involved can look up that credit score and use the information to decide whether to loan you money or not, and at what interest rate.

Some experts are saying the credit score was not originally intended to play such a huge role in loans but was intended to just provide one piece of information about a borrower.

Behind the numbers

So, what goes into determining your credit score?

• Your bill payment history, noting when you are late for things like utility and cell phone bills, and credit card bills.
• Any bills that have gone into collection.
• The amount of credit you’re using — your debt load.
• How much credit you have available.
• How much credit activity you’re been using lately.
• How long you’ve had your accounts.

The players

Canada’s two major credit-reporting agencies are Equifax Canada and TransUnion Canada. These organizations both collect credit information and distribute it to banks and lenders, but also to consumers.

Using your personal information, you can quickly access your credit score online from these companies, paying a minimal fee (about $25). Or, you can have your report mailed to you for free.

What the numbers mean

The Canadian agencies use a numerical system to give your credit score. Basically, they rate you with a number between 300 and 900 (or thereabouts), the higher number indicating a lower lending risk.

So, getting a score of 700 puts you in an average range, meaning you’re likely to get loans at decent rates.

Why check?

Most people look up their credit score when they’re about to apply for an important loan like a mortgage and want to know how it’ll go. Seeing your score can help you better understand what potential lenders are telling you or are about to tell you. It also allows you to see your information and possibly correct any problems or work towards improving your credit score.

Also, credit experts suggest you check your score to ensure there are no errors and that there’s been no fraud on your account. Is this paranoid? Maybe. But if you’ve lost your wallet recently or you have suspicions, checking your score will for certain reveal to you if anyone is using your personal information to borrow money.

Will you check?

Some of us dread hearing the truth about ourselves, and the truth about our credit past is no exception. If you know all is well, perhaps checking won’t be a big deal. Maybe you’ve had rough times and don’t want to know that others remember.

Still, it’s good to know this information is available to you when you need it. Check when you’re really ready to see how you did on this one, important test.