How to calculate a good credit score in Canada?
Are you looking for fast loans without a credit check? Probably, you are a human who wants to solve economic problems quickly. However, what is a good credit score to be approved?
Many companies actively cooperate with many payday lenders across Canada to offer you e loan transfer without credit check as financial support when needed.
Have you ever heard of credit scores? Of course you have. But, do you know from what sum of money it is excellent?
Of course, you’ve had, at least once, an experience like trying to establish a credit facility with your bank or take out a mortgage, so you’ve probably come across the term “credit score.”
As many organizations will monitor credit scores and can provide proper management if a person has a good credit rating!
Given the importance of your credit score, it’s a great idea to understand what factors make up a good credit score.
Below you will receive all the answers to the questions you may be asking yourself today or may have in the future!
How essential is a credit score?
Credit scores can make your life easier by giving you more options.
For example, potential landlords may need your credit score to decide whether to rent space to you for living in or for other purposes.
You may say it’s impossible, but in real life, employers will look up your credit score just to determine what kind of human being you are.
Imagine the following situation: you are applying for a job. You need to understand, potential employers may even ask for your credit score to understand how responsible you are.
Good to know: The higher it is = the better it is
If you have:
High Credit Scores
- lenders understand that you are responsible for paying your bills on time.
- you are an investor worth lending money to.
Low credit ratings
- lender will realize that you are a “high risk” suggestion. This will reduce their willingness to work with your personality. This will reduce their willingness to work with you.
What is a good credit score?
First, credit scores vary between 300 and 900 which means:
- 300 is the lowest score
- 900 is the highest score
A good credit score depends on the lender.
However, in general:
Good = 660 to 724;
Really great = 725 to 759;
Perfect = 760 to 900.
Determining what a good credit rating is may differ from agency to agency.
Credit score brackets
As you have already read, credit scores in Canada range from 300 to 900. Although each potential creditor has their particular standards as to what credit scores are allowed.
Below you can see a range of Equifax as one of a trustworthy guide:
|If your credit scores fluctuate…||They are considered…|
|from 760 to 900||excellent|
|from 725 to 759||very good|
|from 660 to 724||good|
|from 560 to 659||fair|
|from 300 to 559||poor|
The higher your credit score, the more likely you are to get credit card and loans approved and get the best interest rates.
If possible, you’d better work to get the highest score.
Good to know: Nevertheless, if you have a credit score of at least 660, this also entitles you to various loans or credit cards.
Equifax and TransUnion
There are 2 main credit bureaus that are responsible for calculating individual credit scores in Canada.
Good to know: There are no specific discovery formulas that offices use to determine your exact score. This way you should ask an expert.
How to get your credit score?
Your credit score is based on the details of your credit report. You can get your credit report online, by mail and, certainly, in person.
Do you want to read more information about it? Get your credit report and credit score to understand under what conditions you can get financial assistance for anything.
How to get a good credit score?
Still don’t know how to get a good credit score?
Good to know: It will take you a long time to create an exciting credit history over several years in order to really maximize your score.
Overall, credit bureaus across Canada will consider 5 key factors to establish your score:
- payment history
- Credit utilization rate
- Age of your credit history
- Composition of credit
- Number of requests
What matters most is your payment history, count, imagine, 35% of your credit score.
In short, payment history is a record that includes all of your current and up-to-date debts.
Good to know: this file includes credit cards, installment loans and lines of credit.
And according to statistics, the Canadians’ biggest debt is a mortgage.
Also, information about whether you made your payments on time is of some importance. If you have not paid due to the schedule, this indicates your delay.
This negative “point” remains in your payment history over the years.
Therefore, if you want to have a good payment history, you should not allow these “spots”.
Composition of credit
It’s 10% of your score.
The variety of credit you have between installment loans, revolving credit and mortgages.
|Credit Company||Place more emphasis on|
|Equifax||● if you have a history of bankruptcy ● if overdue accounts have been referred to collection agencies.|
|Trans Union||● different types of credit you use, looking for a good combination of revolving credit accounts. ● installment loans|
Use of credit
Accounts for 30% of your credit score. Measure the percentage of your total available credit that you are using at all times.
So if you have loan limits on all credit cards and lines of credit totaling $80,000 and you have a balance of $40,000 on that available credit, the credit utilization rate is 50%.
Good to know: experts advise keeping the credit utilization ratio below 35%.
15% of your score.
This is the period during which your various credit accounts are open.
The longer = the better
Number of requests
10% of your score. It is a measure of the frequency of applications for different types of credit.
When you inquire about a loan or apply for a new credit card, a “serious request”, ie difficult requests, will appear on your account.
Good to know: Many hard draws in a short period of time can be problematic, as they can signal to potential creditors that you are in financial difficulty and need more available funds.
While looking for a credit score, this is called “soft pull”. It certainly does not affect your credit score.