By Arthur Dubois| May 17, 2023 | Credit score,Credit Score Ranges
Borrowing funds from a creditor requires some trust, and your good credit score can create wonderful opportunities for you.How would you feel knowing you qualify for certain loans and mortgages on the basis of your credit score? Excited, right?
Unfortunately, most of us don't think about ourcredit scoreuntil we are about to apply for a loan or rent an apartment. However, your financial health relates to your credit score in some ways, so check it regularly.
How to Access your credit score
You can check your credit score with bothTransUnionandEquifax. These are two credit reporting agencies in Canada. The credit score you get from one credit reporting agency may differ.Other companies likeClearScorealso provide information about your credit score and they do it for free.
Each reporting agency (TransUnion and Equifax) uses its proprietary scoring model. While generally speaking, they use the same approach, how they rank certain variables impacts your final score. You must contact the agency via their official dispute process if there are any discrepancies in your credit report. The law requires that mistakes be removed from your credit report; this will positively impact your score.
So what is your credit score?
Creditscores range from 300-900; if your score is 700, on average, you have “good” credit. The average credit score in Canada is in the 660 range, so if you have a 700 score, you are better than most Canadians.
What you can get approved with a 700 credit score
First and foremost is the boost in self-esteem; there is no denying how great it feels knowing you will be approved for just about any type of credit product. Then, your good credit score opens the door to many opportunities you didn't think possible. Remember, a credit score tells people you are credible and trustworthy in paying back debts.
- Do you want to buy a new cell phone but don't want to pay immediately? A 700 credit score qualifies for special offers on tech like the latest smartphone.
- Are you thinking about applying for a high-level managerial job? One of the criteria they will review is your credit score. Having a 700 credit score shows that you're responsible and have been intentional about your finances.
- The cost of buying and owning a car will be considerably lower. The pandemic has made car loan providers more risk-averse than usual. With your credit score, you could get low-interest rates on certain cars. You are classified as a prime client.
Getting a 700 credit score does not happen by chance. It takes years to reach that level to build and manage your credit responsibly.
Qualifying for a mortgage and buying a home is much easier.
If you are self-employed, your high credit score will help you get mortgage default insurance from mortgage lenders, which allows self-employed borrowers with good credit to buy a home.
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If you don't want to buy a new house, your good credit score can help you rent an apartment. Although, the rental marketplace in Canada is quite competitive. Landlords can do credit checks on potential renters, and having a good credit score can give you an edge over the other potential renters.
How to get and keep your 700 credit score
Credit scores are always in flux; this is excellent news if your score is below 700. Next, we'll show you how to boost your credit score. One of the easiest things to do is to request free copies of your credit report fromTransUnionandEquifax. Earlier, we suggested you check out your credit score; this score is calculated based on the information in the report. After that, you will have to do some analysis.
- Are there any accounts that are past due or being collected? Your credit score will suffer if you have accounts that are past due or in collections. These documents are retained for at least seven years.
We cannot emphasize enough how crucial it is to have your accounts current so that you pay off the collections and bring them current. If you want help deciding the best way to pay off your debts, you can use our debt calculator or credit card payment calculator to show you some options.
- What is your Credit Utilization Ratio? This shows how much debt you currently have with the permitted credit limit. Your credit utilization rate would be 90% if your credit limit was $10,000 and you had a balance of $9,000 overall. Your credit score will be negatively impacted by carrying debt, so work to reduce your utilization rate to 30% or below.
- How long have you had these accounts?The greater the impact on your credit score, the longer the accounts have been active. To reach the 700 thresholds, you will need accounts that are a few years old. This is the message: refrain from closing any accounts.
- Which credit products do you have?The requirement for diverse types is something that cannot be neglected. It is important to have a mix of both revolving credit, like a credit card, and instalment credit, like a car loan, to get the best possible credit score.
- Disputing inaccurate informationin your credit report is something we touched on earlier, but we need to reiterate the importance of using the proper channels. Erroneous information can drag down your credit score and stay on your report for up to seven years, so you need to keep on top of these things.
Having a 700 credit score is just the beginning
While having a 700 credit score is great, you need to start laying the foundation on your journey to a credit score of 800. Remember, anything above 780 is considered excellent, according to Equifax. The theoretical maximum credit score is 900, but if you can reach 800, you are in the top tier of Canadians.
You will need to be very conservative with the debt you carry on your credit cards. Excess debt is a common reason people cannot reach the goal of 800. Try to limit your utilization to twenty percent or lower.
Avoid applying for any new credit unless you need them. It may seem like we are being overly paranoid, but you are on the verge of entering the highest echelon of credit, and even small things will have an impact. Too many hard credit checks in a small amount of time can damage your credit score.
What you can't get approved for with a 700 credit score
Some credit cards are reserved for the most credit-worthy individuals. You could be wealthy, but only those with a credit score well over 700 will be able to access these cards. These cards come with special concierge services and access to exclusive events.
You cannot apply for these cars; they are by invitation only. However, since you only need 100 more points on your credit report, you should do everything possible to reach that goal.
You will have the lowest interest rate goods and access to special credit cards. Financial institutions will also compete for your business. The most credit-worthy consumers are approached by a dedicated team of customer service representatives who ask them to do business with the institution.
The super-high credit score gives you access to the lowest rates on car loans and mortgage products. This gives you options that other less credit-worthy Canadians will never be able to access. It may seem like a far-fetched dream, but you can get there by following the credit-building golden rules.
Recap of the golden rules of how to build your credit score
It takes discipline. It takes time. Here are some of the best ways to get a good credit score.
- Reduce the total amount of unsecured debts you have. It will enable you to save money on interest, and your credit score will start improving. If you are unsure how to clear these debts, you can create a budget if you don't have one and look for ways to save money. The money saved can be allocated against your debts.
- Do not close any of your credit accounts. Closing your credit accounts will reduce your credit score.
- Pay off any bad debts found in your credit report. Bad debts are one of the major causes of a low credit score.
- Sign up for a credit monitoring service and sign up to monitor your credit.
- Usesecured credit cardsto improve your credit score.
These steps are very easy to follow. Once you get into the routine, monitoring things will only take a few minutes a week. Firstly, get your credit score and reports from Equifax and TransUnion.
You will feel great when your credit score is above 750 and is approaching 800. It will create opportunities that only a select few Canadians can enjoy, so start your journey today.
A 700 credit score comes with excitement and a sense of importance, especially when applying for higher loans with lower interest. Also, if you have a 700 credit score, you can maintain and increase it to a higher number.
Fulfilling your financial dreams can be much easier with an excellent credit score. Applying the tips in this article, you won't have an issue getting a mortgage or car loan.
Frequently asked questions
Is 700 a good credit score in Canada?
Yes, it is. A 700 credit score is anexcellent score. With it, you can get access to several discounts on your loan applications from various financial institutions.
Can I rent an apartment with 700 credit score?
Yes, you can. You can rent a niceapartmentwith this credit score. Landlords look out for tenants with excellent credit scores because of their credit worthiness. So, don't worry about renting a house if your credit score is excellent.
Can I get a car loan with 700 credit score?
Yes, you can.Financing a caris not an issue if you have a 700 credit score. You can also have lower discounts from automobile companies when financing your car.
How much can I borrow with a 700 credit score?
You can get as many loans as you want. Creditors are not afraid toapprove loansfrom people with high credit scores. As a result, they usually enjoy lower interest rates on their loans.
Is 700 a good enough credit score to buy a house?
Yes, you can buy a house with a 700 credit score. If your cashdown is less than 20% of the price of the house, you can get the SCHL insurance with acredit score of 600and above.
How do I go from a 700 to a 800 credit score?
It's quite simple. Go through theguidelinesdiscussed in this article, and you stand a chance of increasing your credit score as soon as possible.
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About The Author: Arthur Dubois
Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since his arrival in Canada, he’s built his credit score from nothing.
Arthur invests in the stock market but doesn’t pay any fees because he usesNational Bank Direct Brokerageonline broker andWealthsimple’s robo-advisor. He pays for his subscriptions online with hisKOHO prepaid card, and uses hisTangerine credit cardfor most of his in-store purchases. When he buys bitcoins, it’s with theBitBuyonline platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.
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Yes, credit scores of 700 are considered good. Generally speaking, it means you've managed your payments well in the past and most lenders will trust that you will be able to continue to do so in the future.Is a credit score of 700 good in Canada? ›
In Canada, according to Equifax, a good credit score is usually between 660 to 724. If your credit score is between 725 to 759 it's likely to be considered very good. A credit score of 760 and above is generally considered to be an excellent credit score. The credit score range is anywhere between 300 to 900.What can I qualify for with a 700 credit score? ›
|Type of Credit||Do You Qualify?|
|No Annual Fee Credit Card||YES|
|Credit Card with Rewards||YES|
|0% Intro APR Credit Card||MAYBE|
While it will vary by lender and type of mortgage, in general, the minimum credit score to be approved for a traditional mortgage is around 680. Some lenders may go a little lower, but again, higher is better. A credit score above 700 is considered optimal when applying for a mortgage.What can a 800 credit score get you in Canada? ›
Benefits of a 800 Credit Score
This is because higher credit scores help to prove how financially responsible you are. With a score of 800 you are also likely to get approved for lower interest credit cards and better rewards. A high credit score also helps you get a mortgage or car loan.
In Canada, your credit score ranges from 300 to 900, 900 being a perfect score. If you have a score between 780 and 900, that's excellent. If your score is between 700 and 780, that's considered a strong score and you shouldn't have too much trouble getting approved with a great rate.What percentage of Canadians have 800 credit score? ›
There is no specific number of people with such a high credit score. However, statistics show that roughly 1 out of every seven Canadians has an 800 credit score, which is about 17% of people. In essence, an 800 credit score is not so easy to come by.Is there a difference between 700 and 800 credit score? ›
For a score with a range between 300 and 850, a credit score of 700 or above is generally considered good. A score of 800 or above on the same range is considered to be excellent. Most consumers have credit scores that fall between 600 and 750. In 2022, the average FICO® Score☉ in the U.S. reached 714.How much loan can be approved on 700 credit score? ›
You can borrow $50,000 - $100,000+ with a 700 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.What percentage of people have a 700 credit score? ›
What Percentage of the Population Has a Credit Score Over 700? The same data referenced above also reveals the percentage of the population with a score of over 700. According to FICO.com, approximately 59.2 percent of the U.S. population has a credit score range between 700 to 850.
While you may qualify for a $100,000 personal loan with a 700 credit score, it's not guaranteed. If you have a lot of debt or an unfavorable debt-to-income ratio, some lenders may limit how much they are willing to loan. Most lenders use a variety of factors to qualify borrowers for a loan.What credit score do you need for a 500000 mortgage? ›
Your credit score can have a big impact on your mortgage payment, because a higher score means you'll likely qualify for a better rate. To qualify for most types of mortgages, you'll need a credit score of at least 620.How to get a credit score of 900? ›
A perfect score generally requires years of exemplary financial behavior, like making on-time payments, keeping a low credit utilization ratio, and maintaining a long history of credit accounts. A wide credit mix and only a few hard credit checks also play a role in boosting your credit score.What is the average credit limit in Canada? ›
For comparison, a recent Equifax Report indicates the average credit limit in Canada is around $5,800. Credit limits are based on several factors, including personal income, employment history, debt-to-income ratio, credit history and score, and credit utilization.What percentage of the population has a credit score over 800? ›
Less than 21% of people have a credit score over 800. A credit score of 800+ is considered perfect credit, indicates that a borrower uses credit very responsibly, and qualifies the person for the best loan and credit card terms.What is the average credit score in Canada by age? ›
|Age||Average Credit Score|
|26 – 35||~697|
|36 – 45||~710|
|46 – 55||~718|
The Average Canadian Credit Scores
According to TransUnion (one of the two main credit reporting bureaus in Canada), the average Canadian credit score is around 650. Based on the credit score ranges we discussed above, most Canadians have fair credit, though some lenders may consider 650 as good.
In Canada, credit scores start at 300 and go as high as 900. A bad credit score is a score of 574 or less and means banks, lenders, landlords, and even some employers will consider you less financially responsible than borrowers with a higher score.How to get a 850 credit score Canada? ›
- #1. Make your payments on time. ...
- #2. Pay in full, whenever possible. ...
- #3. Use your credit card, pay it off. ...
- #4. Check your credit report regularly. ...
- #5. Watch your credit utilization ratio. ...
- Lower interest rates. ...
- Better lending terms. ...
- Higher credit limits.