What is a good credit score in Canada, and what does it mean for your borrowing ability? A good credit score indicates that you’re a responsible borrower. This is incredibly important when financing a home or car. After all, low scores can lead to credit denials or high interest rates. This article explains what a good score is, and how to get one.
What Is a Good Credit Score in Canada?
According to Equifax, a good credit score begins at 660. From here to 900, it can also climb to very good and excellent levels. Naturally, the higher your credit score, the better the loan rates you can expect.
CreditKarma provides a more detailed score breakdown, which sets the “good” threshold a little lower:
- 650 to 719: This is good credit and can get you access to some reasonable interest rates.
- 720 to 799: Very good credit drastically improves your loan options as a reward for strong money management skills.
- 800 to 900: Excellent credit provides access to the absolute best interest rates.
How Do You Know What Is a Good Credit Score in Canada?
There are two leading credit reporting agencies in Canada: Equifax and TransUnion. They use slightly different scoring models, so checking your credit via both agencies is essential.
You can get your free credit report from each agency at least once per year. The credit bureaus accept requests via phone, fax, and mail. If you prefer to order online, even better. TransUnion Canada provides a free online copy of your credit report every month.
Some banks provide access to your scores. In other cases, you can rely on personal finance apps, such as CreditKarma.
What Do Canadian Lenders Want To See?
Maintaining and improving a good credit score requires sound financial management skills. It also requires a particular focus on credit management. Note that not every action that benefits your overall finances looks good to lenders.
For example, paying off all your loans and giving up credit cards might look great for your budget, but lenders make no money from that. Instead, they want to see the following:
- Proof of understanding what is a good credit score in Canada
- The use of a mix of different types of credit, such as loans and lines of credit
- Selectiveness about when you apply for credit to reduce hard inquiries
- Excellent history of paying bills on time
- Low credit usage and low debt
How Can LoanConnect Help You Boost Your Score?
LoanConnect is a Canadian online lending marketplace that offers personal loans, debt consolidation, and other financial services. People looking to build their credit scores have often turned to our company to use personal loans as credit-builder loans.
Personal loans are installment loans, so they can improve your credit mix if you currently only have credit cards. Provided you keep up with the payments, they can also help you demonstrate a positive payment history. This is vital for new credit users. Are you ready to apply for a loan to consolidate your debt and rebuild your credit? Are you ready to have a score that answers the question: what is a good credit score in Canada? We have several options available for you. Apply today.