What is a Good Credit Score in Canada?

So. You know what your credit score is
but what does that mean? Is it good? Is it bad? What is that magic number that
you’re going to need to secure that car loan and what happens if your magic
number isn’t so magic how do you change or improve your score in this video I’m
going to teach you exactly what a good and a bad credit score is in both Canada
and the US and how you can change and improve your score hello everyone welcome to the ReadySet
life youtube channel my name is brittany and i’m a financial coach who makes
videos all about helping you take the fear out of finance so that you can live
the rest of your life I put out new videos every single Thursday so if you
think that you might be interested in seeing more like this
just hit that subscribe button and the notification bell so you won’t waste any
of my new uploads alright so last week I taught you what a credit score was and
how to check it but how do you know if it’s actually good that is what we’re
going to be talking about today if you missed last week’s video I’m gonna link
it up above because I suggest that you also watch that one as well that’s going
to be really helpful in figuring out how the information from this video can
relate to your personal situation so what is considered good credit
obviously it will depend on the company that you’re asking to loan the money
from where the line is between good and bad credit however in general the higher
that your number the better your credit is if we take a look at Equifax and
remember from the last video I said that that was one of the top official credit
bureaus they say anything from 660 to 724 is considered good credit anything
from 725 to 759 is considered very good credit and anything from 760 and above
is considered excellent credit this means that anything below 660 is
considered bad credit now if you’ve already checked your credit and you find
yourself in that zone don’t freak out yet there are definitely ways that you
can improve that number and it really does depend on kind of where you are
within that lower than 660 range so for example from 562 660 you might actually
be still okay for getting a loan you just might not have great loan terms or
have a lot of wiggle room on what they’re willing to give you however if
you’re on that lower end that 300 to 560 range that’s where we’re going to run
into some problems so if you do find yourself here how do you turn it around
let’s look at how these scores are calculated no one knows with 100% certainty on how
credit scores are calculated the bureau’s don’t release their exact
formulas and if they did it would be way too easy to cheat the system however we
do know the factors in which they’re looking at and have kind of a rough idea
of how much each of them matter credit history is a big one
lenders the people that you’re borrowing the money from want to know that you
have a long history of properly repaying debt so they can know that it’s more
likely that you’re going to repay theirs the longer your accounts have been
opened the better if you don’t have a credit history it can be pretty
difficult to get approved for credit it’s kind of like the chicken and egg
scenario or applying for one of those entry-level jobs that require three
years of experience you have to have credit to get credit it can be pretty
frustrating hopefully you’ve got some sort of credit card in college or
university that you can start with but if you don’t have any credit history
start one you’re going to have to be able to show that you can pay something
off responsibly and the quicker that you start the better off that you will be
along with credit history payment history is also a pretty important
factor of your score again the lender wants to know that you are
responsible with what you’re given and you stick to the agreement terms I Eve
paying your loans in the amount that satisfactory and on-time if you pull the
report and you find that you’ve messed up a couple of times on payments it’s
okay you can’t fix the past but you can be better moving forward so take a few
months and be consistent with your payments the further that you can get
yourself away from that old irresponsible you the better that you’ll
be able to prove that you’re reformed and your credit will improve so don’t
miss a payment again and you should be okay another thing that’s really
important to your score is credit usage credit usage is basically how much of
that debt that you have or the ratio of the available amount and how much you’re
actually using it’s important to have a credit history but if you have too many
accounts open with too high balances then it can really affect you negatively
so a good rule of thumb is to make sure that you’re keeping your credit usage at
or below 30% of your available credit if you have a credit card limit of say
$2,500 make sure that there’s no more than a seven hundred and five
dollar balance on it at a time now obviously the lower the balance the
better it is if you can pay off your credit right away in full that’s the
best-case scenario but if you’re having trouble really try and keep it as close
to that 30% as possible another trick that people use for this is to say yes
to those credit increases that the banks will try and sell you on now obviously
you have to be very careful with this if you are not a good credit user and you
know if you’re not and this trick isn’t for you but if you are pretty
responsible with the way that you use your credit cards say yes to those
offers don’t be afraid to have more credit because there’s no harm in having
a higher limit on your card you do not need to use it but it does make that
percentage threshold higher and will add to your credit score there are two types
of credit checks a hard credit check and a soft credit check if you’re checking
your score just for your own interest or maybe you’re getting like a background
check from an employer or like a landlord or something it’s most likely a
soft credit check and this type of check does not affect your credit score a hard
credit check happens when you’re actually asking to borrow money and this
does appear on your report and will actually put your credit score down a
few points for a little while lenders will take a look at the number of hard
credit checks on your account because that can be an indication of whether
you’re applying for just for what you need or maybe you’re in a bad financial
spot and you’re applying for too much credit too fast the type of credit that
you have also affects your score so if you have a mix of different types of
debts a credit card and a house and a line of credit then it can really show
companies that you’re able to balance and manage different types of payments
at once which is a good thing it’s not looked down upon if you don’t have
different types of debt but it does add to your score if you have kind of a more
diverse portfolio if you want to improve your score try
looking at all of the factors that I just mentioned figure out where your
weakest points are and try and work on improving those first that being said
all of these factors contribute differently to how your score is
calculated so make sure that you’re also taking a look at which parts that the
credit bureaus keep in priority let me explain what I mean
credit bureaus that are calculating your score use two main formulas the Vantage
score and the FICO score the formula that the credit bureau chooses to use
will really determine how much of those factors I mentioned matters here is a
breakdown of the importance of each factor in each formula and feel free to
pause and take a screenshot and do whatever you kind of need to do to spend
the time reading the graphic because I know it’s a lot of information on it most of the credit-card bureaus use FICO
formulas so I would concentrate on that one first however an important part of
your credit score no matter which formula is being used is your payment
history this definitely proves that you can be responsible with your money so if
you have a bad credit score work on building this first always pay something
on your credit cards if you can’t make minimum payments call your credit card
company or loan company often they’re willing to work with you on some type of
modified plan they just want to see that you’re trying and make sure that you
call them if you ever do miss a payment if you’ve always been really great with
your payment’s and you mess up one time see if you can get it reversed you don’t
want that record on your credit and if you’re a loyal customer the companies
are often willing to do this at least once or twice which can make a huge
difference for you alright hopefully that wasn’t too overwhelming for you I’m
a pretty detailed person and I want to know all the information so I try and
put that forward but I know that it can be a lot so please feel free to pause
take a break come back to the parts of the video whenever you need to if you
like this video give it a like and if you want to see more of my videos make
sure that you click that subscribe button and ring the notification bells
so you don’t miss any of my new videos alright thanks for watching and until
next time I’m wishing you great financial health bye one of the
top official credit card euros is it credit card another trick that people
use for this is to say yes and put a friggin turtle you

12 comments on “What is a Good Credit Score in Canada?”

  1. Ready Set Life Financial Coaching says:

    I get pretty frustrated when all the financial advice I see is for the states. Or, is not specified so I have no idea if it applies to me! That’s why this video goes over the specifics in BOTH countries. All the info in this video applies in the states and in Canada! – Make sure to check out the links in the description for further reading!

  2. Steven J McNeil says:

    Thanks for the tips

  3. TNASTY CUZ says:


  4. The Frugal Latina says:

    So happy I found your channel. I am starting my YouTube Channel on Finance as well! Your content is amazing so far, hopefully we can collab some day☺️

  5. Ange VPV says:

    How does a newcomer build a good score? Any tips? Please, make a video about it.

  6. Rachel Brooklyn says:

    I suggest you a credit repair service. You can reach out to there website saviorcashaddertools.wordpress,com


    Hello and thank you for all the videos that you upload I have a question for you I will be migrating to Canada my credit score in the US it’s 740 but I’m not sure can I take that credit score to Canada or do I have to start a new credit in Canada let me know thank you

  8. joe Hne says:

    Do you know anything about RDSP?

    I like your videos you’re very clear of what you’re saying.

  9. Life in Canada Info for Immigrants and aspirants says:

    I like ur way of explaning. It was very informative 👌🏻👌🏻👌🏻

  10. Zokizzy Foshizzy says:

    Not a single credit company will tell customers this kind of information. Thanks for sharing.

  11. Infernitysx says:

    it's probably worth noting that in Canada, hard pulls stay on your credit report for 36 months vs only 24 months for USA.

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