Knowing your credit score will give you a good idea of how lenders will look at you when you apply for credit. A good credit score can unlock more financial opportunities. But what kind of credit score do you need to be considered to have ‘good’ credit and access all the financial products available? More specifically, is 650 a good credit score in Canada?
Key Points
- A 650 credit score in Canada is categorized as ‘fair’.
- Having a credit score of 650 could make it slightly more difficult to get approved for loans and credit products from traditional lenders.
- A 650 credit score can also result in higher interest rates and lower credit limits or loan amounts.
- If you’re unable to qualify for a loan with a conventional lender, there are alternative lenders out there who cater to those with less-than-perfect credit.
What Does It Mean To Have A 650 Credit Score In Canada?
A 650 credit score in Canada is considered ‘fair’, though it’s just slightly below the ‘good’ credit score threshold. With a score around 650, you may still be able to get a loan with a traditional lender, though you may have more difficulty.
A credit score in the range of 620 to 680 is the general minimum level that lenders typically accept, although the exact credit score required for various loan products will vary from lender to lender. So, while you may be able to qualify for credit with a score of 650 with one creditor, this may not be high enough for others.
Credit Score Ranges In Canada
Credit scores in Canada range from 300 to 900. Here’s how they are broken down and rated:
| Credit Score Rating | Credit Score Range |
| Excellent | 760+ |
| Very Good | 725–759 |
| Good | 660–724 |
| Fair | 560–659 |
| Poor | 300–559 |
Based on this chart, a 650 credit score falls under the “fair” category.
| Do You Know What Your Credit Score Is? If you don’t know what your credit score is, you can check it for free with Loans Canada CompareHub. |
Reasons You May Have A 650 Credit Score
You may have a 650 credit score for two main reasons: either you have limited credit history, or you have some negative remarks on your credit report.
- Limited credit history: If you’ve recently started using credit, your credit score may be low simply because you don’t have enough data on your credit report to properly calculate your credit score.
- Negative remarks: On the other hand, negative information on your credit report can pull down your credit score. This may include missed payments, high credit utilization ratio, recent hard inquiries, open/closed accounts and other negative remarks.
How Will A 650 Credit Score Affect You?
A fair credit score could make it more challenging to get approved for various financial products. If you do manage to get approved, you may face higher interest rates and lower loan amounts.
That said, a 650 credit score is right at the cusp of ‘good’ credit, so you may have luck with some lenders.
Getting A Personal Loan With A 650 Credit Score
With a 650 credit score, qualifying for a personal loan is possible with a bank or alternative lender. While some banks may accept a 650 credit score, others may accept it on the condition that you provide a co-signer or some form of collateral.
On the other hand, alternative lenders such as credit unions and private lenders will generally accept a 650, as they place less emphasis on your credit and more on your overall financial situation. That said, the interest rates you qualify for will generally be higher than those with good to excellent credit.
Getting A Credit Card With A 650 Credit Score
Most credit card providers generally require a credit score of at least 660. Premium cards that offer better rates and more perks may require a credit score that’s even higher. If you apply for a credit card with a score of 650, you may still be able to qualify.
If you’re unable to qualify for a traditional unsecured credit card, there are other options available that you may be able to access, like secured credit cards, store credit cards, and prepaid credit cards.
| Best Store Credit Cards In Canada | Learn More |
| Best Secured Credit Cards In Canada | Learn More |
| Best Prepaid Credit Cards In Canada | Learn More |
Getting A Mortgage With A 650 Credit Score
Most mortgage lenders, especially traditional lenders such as banks, require borrowers to have a minimum credit score of 640. That said, credit scores between 620 and 680 may be accepted depending on the lender and your overall financial profile. Generally, banks will have strict credit score requirements, while credit unions and private mortgage lenders will be more lenient, though they may charge higher interest or approve you for lower loan amounts. Some lenders may even require a co-signer to reduce the loan risk.
Ultimately, credit score requirements are up to the individual lender. Further, credit scores aren’t the only factor considered when approving a mortgage application. Lenders will also look at your income, debt level, recent payment history, and debt-to-income ratio. So, if these other factors are strong, some lenders may be willing to work with borrowers with credit scores in the 650 range.
Getting A Car Loan With A 650 Credit Score
Car loans are usually easier to obtain with lower credit scores because the car itself acts as collateral for the lender. While there is no universal minimum credit score requirement, having a ‘good’ credit score (660+) will give you the best chance of securing a car loan with low rates.
Given how close 650 is to 660, you might find it easier to get a car loan. However, if the loan is a large amount of money, the lender might require a co-signer or a larger down payment. Similarly, you may be charged higher interest rates than those with good credit.
How A 650 Credit Score May Affect Your Job Hunt
Some employers may check your credit report when you apply for work, particularly for jobs that involve handling finances or sensitive data. Your credit score will give an employer an idea of how trustworthy you’ll be as an employee and whether you’re capable of managing financial responsibilities.
A 650 credit score is not bad, but it’s still somewhat low and could raise red flags for certain employers. However, it may not necessarily be the sole factor in the employer’s decision whether to hire you, as long as all other factors check out. Ultimately, it depends on the employer and your specific situation.
How A 650 Credit Score May Affect You Getting An Apartment
Many landlords may check credit scores as part of their tenant screening process. Ideally, your score will be on the higher end, which may be an indication of your ability to make timely payments. In turn, this might mean you’ll be more likely to pay your rent on time.
Again, 650 is not considered poor, and it may be enough to secure a lease. But some landlords may prefer something higher. As is the case with different employers, different landlords might have their own specific credit score requirements when vetting prospective tenants.
How A 650 Credit Score May Affect Your Insurance Premiums
Insurance companies may conduct credit checks before providing a quote on premiums and coverage amount. A higher credit score presents less of a risk in the eyes of the insurance provider, particularly when it comes to paying premiums and filing insurance claims. A credit score of 650 could be considered a bit low by many insurers, who may charge higher premiums to offset their perceived risk.
Ways To Improve Your 650 Credit Score
Before considering a high-cost or high-interest loan, consider taking some time to build healthier credit. Here are a few steps to take:
Pay Bills On Time
Your payment history is one key factor in determining your credit scores. Depending on the credit scoring model, your payment history can account for around 35% of your credit score calculation.
Therefore, paying your bills on time and in full can help you establish a positive payment history, which may help improve your credit scores.
Apply For A Secured Credit Card
If you’re looking to build your credit from scratch or are trying to rebuild after a financial hardship, a secured credit card is a good option to consider. Consumers, even those with bad credit, are almost guaranteed approval, as you simply need to be able to provide a deposit to secure the card or meet minimal requirements.
Once you start using the card responsibly, your payments will be reported to a credit bureau, which will help build or rebuild your credit.
Monitor Your Credit
Monitor your credit report regularly to ensure there are no discrepancies. Sometimes, a credit report might show an outdated debt, or even show a debt that doesn’t belong to you. Monitoring your credit report allows you to rectify any errors, which may be hurting your credit.
Reduce Your Debt-To-Credit Ratio
Also referred to as your credit utilization ratio, your debt-to-credit ratio compares the amount of revolving debt you carry to the amount of credit available to you. This ratio is another common factor used in calculating your credit scores. It typically accounts for about 30%.
Generally speaking, lenders prefer a debt-to-credit ratio of 30% or lower, as higher ratios can indicate that you may be financially overextended. One way to reduce your ratio is by increasing your credit limit, spending less on credit, or paying off your credit card(s) or line(s) of credit more frequently.
Use A Credit-Builder Program
Using a credit-builder program is one way to establish or improve your credit score. These programs typically report on-time payments to the credit bureaus, helping you build a positive payment history without taking on additional debt. A couple of notable credit-builder programs to consider include the following:
- KOHO Credit Building Program: With this program, KOHO establishes a line of credit in your name, though you won’t have access to any funds. The credit line is solely meant for credit-building purposes. Then, you’ll make monthly payments (including the program subscription fee) toward your line of credit, which are reported to a major credit bureau in Canada, helping you establish good credit.
- Spring Financial – The Foundation: Through this program, you can save $750 over a 12-month period. Every monthly payment you make is reported to a credit bureau, helping to build your payment history. By the end of the program, you’ll have saved $750, and can automatically qualify for Spring Financial’s Evergreen Loan, which provides a $1,500 cash advance.
The downside of these programs is that they usually have a monthly fee. It would cost you less to use a secured card.
Have Your Rent Reported
If you rent, you may be able to use your rental payments to build credit. Typically, rent payments are not reported to the credit bureaus, which means a missed opportunity to build credit. Fortunately, there are services available that help you report these payments as a way to establish good credit.
Services such as the Landlord Credit Bureau (LCB) and City Lending Centers (CLC) help tenants report on-time rent payments. Just be sure to pay on time, as late payments can negatively affect your score if they’re reported.
Learn more: Can Your Rent Payments Help You Build Credit?
How Long Does It Take To Improve A 650 Credit Score?
Improving a 650 credit score can vary significantly depending on the steps you take, your consistency, whether you have a history of bankruptcy or consumer proposal, and what you eventually want your score to be.
Generally, with consistent positive credit habits, you may see noticeable improvements within 3 to 6 months. However, more significant changes might take upwards of 6 to 12 months or longer.
Learn more: How To Increase Your Credit Scores Immediately
Final Thoughts
A credit score of 650 isn’t bad, but it’s not good, either. The good news is that 650 is just under the threshold of what would be considered a ‘good’ credit score. That means you may still have some luck getting approved for credit, and with some effort and patience, you can achieve good credit within a few months of making responsible financial decisions.
