The Importance of Your Credit Score in Canada - Approval Team Canada - Under New Management
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The Importance of Your Credit Score in Canada

Your credit ratings are an essential part of your financial profile.

They can be used to determine some of the most important financial factors in your life, for example, whether or not you can rent a vehicle, qualify for a mortgage, or get a job.


And, taking into account that 71% of Canadian families have debts in any form (mortgages, car loans, lines of credit, personal loans or student loans), a good credit should be part of your current and future plans.

High, low, positive, and negative credit report – there is a lot more to you than you think. And depending on how good or bad your credit report, your borrowing and credit possibilities will vary.


What is a good credit rating?


Let’s look at the numbers.

How your credit ratings are determined?

Canadian credit ratings are formally calculated by two major credit bureaus: Equifax and TransUnion.


They use the information in your credit report to calculate your ratings. The factors that are used to calculate your scores include your payment history, how much you owe and how long you use the credit.

The numbers what do they mean?

In Canada, your credit ratings generally range from 300 to 900. The higher the score, the better. High ratings may indicate that you are less likely to miss payments if you take out a loan.


You will see below a general breakdown of credit rating ranges and what each category means regarding your overall ability to qualify for a loan or credit, such as a car loan or a mortgage.


The best way to know where your ratings are is to check your credit report. You can now check our credit score for free, from companies like Borrowell, Equifax, TransUnion, and myFICO. Borrowell’s free credit score service will also send you monthly updates, so you can track your score and look out for any changes.

  • From 800 to 900: Congratulations! Your credit is excellent. Keep doing what you do.
  • 720 to 799: Your credit is outstanding! You must expect to have a variety of credit choices, so continue your healthy financial habits.
  • From 650 to 719: This rating is considered good with lenders. You may not qualify for the lowest possible interest rates, but keep your credit history strong to help improve your credit health.
  • From 600 to 649: This rating is reasonable. A history of debt repayment will be crucial to demonstrate a strong sense of financial responsibility.
  • From 300 to 599: Your credit needs work.


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How to go from good to excellent (or bad to good)?

Healthy financial habits set ideal credit ratings, but a multitude of factors could damage your credit scores. Many different issues can affect your credit, including:

  • Late or missing payments
  • Too much (or not enough) credit accounts
  • High credit card balances
  • High balances on loans
  • Too many credit applications

The first step towards improving your credit health is to avoid trapping yourself in the ups and downs of managing your credit.


Heather Battison, Vice President of TransUnion Canada, explains the importance of consistency: “The most important factor in establishing and maintaining your ratings is paying your bills on time and in full every month. This activity demonstrates your ability to manage credit responsibly and can have a positive impact on your credit ratings. “


It is also important to remember that the history of your payments is not just the payment of your credit card bill. It also includes things like your cell phone bill.


Building good credit ratings are also based on the responsible use of your credit card, which means that you must make at least the minimum monthly payment (if you cannot pay the balance in full), paying bills before the due date and maintaining a low usage of your credit cards.


Pay attention to third-party companies that claim they can quickly increase your ratings. According to the Office of Consumer Affairs, only your creditors can change the information in your credit report. When it comes to establishing a good credit history, there are no shortcuts.


Many companies can help you keep your credit ratings as healthy as possible by periodically reviewing your credit reports to make sure they are accurate.

Approval Team offers best deals and full assistance with anything you might need along the way.

The whole process is hassle-free and quick. Apply HERE and get one step closer to getting approved for the vehicle you always wanted.


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