What is a Good Credit Score in Canada?

Credit scores in Canada range from 300 to 900, with the higher numbers indicating a healthier financial record and less of a risk to the lender. Good credit scores start in the low 700s; the higher they are, the easier it will be for you to get a loan. Your interest rates are also determined by your credit scores, with the best rates going to those with scores over 760. Your credit score not only impacts your ability to get a loan, but it also impacts your options when renting a home or purchasing a cell phone. Maintaining a good credit score is essential to your financial well being.

Function

Good credit scores in Canada function as the foundation for attaining any type of financing or loans. You can keep track of your credit score by subscribing to an online monitoring service or by contacting the three main Canadian credit reporting bureaus.

Types

The three credit bureaus in Canada are Equifax Canada, TransUnion Canada and Northern Credit Bureaus Inc. You can request a free copy of your report from Equifax and TransUnion as often as you need it, but Northern Credit only offers one free report per year.

Significance

Higher credit scores in Canada mean lower interest rates for the money you are borrowing. A good credit score, 760 or above, will help you qualify for the best rate possible on any type of financing. Good credit scores are not the only consideration, but it is impossible to receive a low interest rate without a good credit score.

Considerations

Credit reports in Canada are based on your payment history, your outstanding debt, the types of credit you are using, your credit history or how long you've had credit and the types of credit you are pursuing.

Prevention/Solution

Improving your credit score before you apply for a loan could have a significant impact on your monthly payment as well as your ability to qualify. You can repair your credit yourself with patience and persistence. Be careful of companies who claim they can quickly repair your credit for a fee; this is not possible, as credit repair takes time. Your first step is to order your credit reports from the three reporting agencies. Dispute any incorrect or outdated information in writing with each agency. They should respond to your request within 30 days. A few ways to ensure that you have a good credit score are to never go over the limit on your credit cards; try to pay off your debts as soon as you can; build a positive credit history with credit cards and other consumer loans.