One of the most common uses of good debt is to buy a home. In addition to a place to live, the value of houses has traditionally risen over time. Using borrowed funds to start or buy a business is another example of a good debt. When you apply for a loan or credit, the lender will usually check you out with a credit bureau to get a snapshot of your finances. This ranking can be arrived at in many ways.
Credit bureaus develop their own statistical ranking systems.
In addition, some lenders, working with the bureaus, have their own rating methods. There are two major credit bureaus in Canada, and you can get your credit rating from each, for free. Click here for instructions. All loans are either secured or unsecured. This refers to whether you are putting up assets, often referred to as collateral, to guarantee your loan.