Even though you will need money to properly structure your debt, it is preferable to structure your debt in a way that raises your credit score rather than paying off your debt in full.
Credit scores are important in the complex world of finance because they affect our ability to get loans, rent apartments, and even get the jobs we want. Knowing your credit score is essential for confidently navigating the financial landscape, and in Canada, a score of 700 is considered to be in the coveted “good” range.
But what does a good credit score mean for you?
Let’s delve deeper into the world of Canadian credit scores and explore what a 700 score signifies, how it compares to the national average, and the strategies you can employ to improve your creditworthiness
Understanding Credit Scores in Canada
Two major credit bureaus, Equifax and TransUnion reign supreme in the Canadian credit landscape assigning credit scores to individuals based on their credit history. These scores, ranging from 300 to 900, provide a snapshot of your financial reliability and predict your likelihood of managing future credit responsibly.
Here’s how Equifax, one of the leading credit bureaus, categorizes credit scores:
- 800 to 900: Excellent
- 740 to 799: Very Good
- 670 to 739: Good
- 580 to 669: Fair
- 300 to 579: Poor
A 700 Credit Score: Your Ticket to Financial Opportunities
With a credit score of 700, you’ve built a strong foundation of responsible credit behavior. It’s likely that you will be eligible for a range of loans with advantageous terms and interest rates, from credit cards to mortgages.
Nonetheless, certain financial products may be exclusive to individuals who achieve exceptionally high scores. But don’t worry, there’s always space for growth, and you can achieve even greater success with your 700 score if you take some calculated actions.
Boosting Your 700 Credit Score: A Path to Financial Empowerment
Improving your credit score unlocks a world of financial opportunities, paving the way for lower interest rates, higher credit limits, and access to premium financial products. Here are some key strategies to elevate your credit score:
- Pay on time, every time: Consistency is key. Make timely payments on all your credit accounts, from credit cards to loans, to avoid late payment penalties and negative impacts on your score.
- Reduce credit utilization: Aim to keep your credit card balances low relative to your credit limits. High utilization can negatively affect your score. Pay down existing balances and use credit cards sparingly.
- Build a positive payment history: Establish a track record of responsible credit usage by paying not just credit cards, but also loans, mortgages, and utility bills on time. Over time, a positive payment history will boost your credit score.
- Minimize new credit applications: Each time you apply for new credit, a hard inquiry is recorded on your credit report, which can temporarily lower your score. Limit unnecessary credit applications and only apply when necessary.
- Maintain a mix of credit: Having a healthy mix of credit accounts, such as credit cards, loans, and a mortgage, can positively impact your credit score. However, be cautious and only take on credit that you can manage responsibly.
- Keep older accounts open: The length of your credit history matters. Avoid closing older credit accounts, as they contribute to the average age of your accounts. Keeping them open, even if unused, can help maintain a longer credit history.
- Regularly check your credit report: Obtain free copies of your credit report from Equifax and TransUnion and review them for errors or discrepancies. Report any inaccuracies to have them corrected promptly.
- Manage debt responsibly: Reduce your overall debt burden by paying off outstanding balances. Focus on high-interest debts first and consider debt consolidation options if it makes financial sense for you.
- Utilize credit building tools: If you’ve got a low or no credit score, credit building services can help you build your credit history. KOHO offers three ways to build your credit with its Credit Building. For just $10 a month (or as low as $7, depending on the account plan you choose), there are no credit checks, no approvals, and no interest. It also comes with access to a financial coach and your credit score on demand.
Remember, improving your credit score is a gradual process. Stay committed to responsible credit behavior, and over time, you’ll see positive changes to your creditworthiness.
The Benefits of a Good Credit Score: Unlocking Financial Advantages
Possessing a high credit score places you in a strong position to improve your financial situation and opens doors to a world of financial opportunities. Here are a few of the main justifications for working toward a high credit score:
- Access to lower interest rates: Lenders typically offer lower interest rates to individuals with good credit scores, saving you money on loans, mortgages, and credit cards.
- Easier loan approval: A good credit score increases your chances of loan approval for larger purchases, such as a home or a car.
- Higher credit limits: Lenders are more likely to extend higher credit limits to individuals with good credit, providing greater flexibility during emergencies or significant purchases.
- Better rental opportunities: Landlords often perform credit checks on potential tenants. A good credit score makes you a more desirable candidate, increasing your chances of securing your dream rental.
- Negotiating power: With a good credit score, you have the advantage of being seen as a reliable borrower, giving you an edge when applying for credit by enabling you to negotiate lower interest rates, fees, or repayment terms.
- Access to premium credit cards: Good credit scores make you eligible for premium credit cards with attractive benefits, such as cash back rewards, travel rewards, or exclusive perks.
- Increased Borrowing Potential: A high credit score allows you to borrow larger amounts of money, whether it’s through a personal loan, mortgage, or a higher credit card limit. This flexibility can be highly beneficial when making large purchases such as a home or a car.
How to Access Your Credit Score: Taking Control of Your Financial Reputation
Knowing your credit score is the first step toward managing and improving it. You can access your credit score by requesting a free copy of your credit report annually from Equifax and TransUnion. Both bureaus also provide online credit score check services, sometimes for a fee.
KOHO also provides free monthly credit score updates to Credit Building customers, helping you track your credit score regularly without the need to manually request it from the bureaus.
When you access your credit report, aside from your score, you’ll see a list of open and closed credit accounts, payment history, credit inquiries, and any derogatory information. Monitoring this report enables you to control your financial reputation effectively.
What if You Don’t Have a Credit Score?
Not having a credit score could indicate you’re new to credit or have little recent credit history. This can be challenging as many lenders require a credit score to assess your creditworthiness. Fortunately, KOHO offers services that can help you build credit from scratch or improve a lower score.
The KOHO Credit Building service is an ideal platform for those looking to establish or build their credit history. It works much like a subscription service, charging fees as low as $7 per month, depending on your account plan. There are no credit checks, no interest rates, and you can cancel anytime. Users also have access to financial coaching and their credit scores on demand.
Note: KOHO product information and/or features may have been updated since this blog post was published. Please refer to our KOHO Plans page for our most up-to-date account information!
A 700 credit score in Canada signifies a solid foundation of good credit habits, opening doors to a world of financial opportunities. By understanding how credit scores work and implementing strategies to improve yours, you can unlock the benefits of a good credit score and achieve your financial goals.
How do you find out your credit score?
In order to check your credit score in Canada, you actually have a few different options.
Using one of the many available apps, such as Credit Karma, Borrowell, or others, is the first method for checking your credit score. These apps function by asking you for your information and providing you with a soft credit score. This is basically a rough estimate that is usually correct within 100 points. You can monitor whether and by how much your score is rising or falling if you check it frequently, even though it might not be the most accurate. The app you choose will depend on if you are checking your Transunion or Equifax score.
When you apply for a new credit account
When you apply for a new credit account or tradeline, the lender will frequently inform you of your current credit score regardless of your approval status. This is a pretty accurate representation of your current credit score since it is a hard credit check.
The lender will then usually go over the credit report with you in detail. You may notice there may be something missing or an account that should have been taken off. You can then contact the credit bureaus to get any issues resolved. The lender most likely will only check one credit bureau, similar to the other methods of checking your credit.
If this is the case, you are able to use another method to check your other credit score. But since you do lose anywhere from five to fifteen points for each hard check, it’s crucial to keep in mind to limit your annual intake to five or fewer.
Lastly, you can get your credit score directly from the credit bureaus. Once per year, you can request a free hard credit cheque from each credit bureau. Even though it’s not required, if you’re actively working to raise your credit score with a specific objective in mind, this is a great way to monitor it. Otherwise, checking with soft credit checks is also a good idea. The credit bureaus update a soft credit check that you can view on their website every month, much like the credit score apps.
How Much Can You Borrow With a 700 Credit Score? (What Is a Good Credit Score?)
FAQ
Can you get a mortgage with a 700 credit score Canada?
Can I get anything with a 700 credit score?
Can you get a 900 credit score Canada?
Is 700 a good credit score to buy a house?
Is a 700 credit score good in Canada?
A 700 credit score is considered “good” in Canada. You are able to qualify for personal loans, credit cards, and mortgages; however, you may not get the most competitive rates. While a 700 credit score is a lot better than having a 400, 500, or 600 credit score, there is room for improvement if you want to enjoy the best lending terms.
What is a good credit score in Canada?
The law requires that mistakes be removed from your credit report; this will positively impact your score. So what is your credit score? Credit scores 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.
Is 700 a good credit score?
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.
What credit cards can I get with a 700 credit score?
You can qualify for several credit cards with a 700 credit score or higher. While some premium rewards credit cards require a higher score, you have options. No-fee cash back credit cards you can consider include: Tangerine Money-Back Credit Card: You can apply with a 600+ credit score, and it has no annual fee. Learn more in this review.