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At some point in your life, there’s a good chance your credit will become important, whether it’s when you’re buying a house, financing a car, or applying for a credit card. The higher your credit is, typically the easier it will be to qualify for large amounts of credit and low-interest rates.
But, what happens if your credit score is 700 or below? Is it still possible to borrow credit from lenders in your region? Keep reading to find out.
Is A 700 Credit Score Bad?
Canadian consumers who have a credit card or have taken out a loan have a credit history and therefore a credit score. Actually, consumers have more than one credit score as there are two credit bureaus, Equifax and TransUnion, and several different methods of calculating a score. All credit scores range from 300 to 900.
Scores close to 900 mean you’ve been using your credit products responsibly and are more likely to continue to do so. With a good to excellent score of 660 – 900, most lenders will approve you. However, if your score is 300 – 659, this likely means you’ve had some trouble keeping up with your payments in the past.
Will I Get Approved For A Loan With A Credit Score Of 700?
It’s important to note here that if you checked your credit and see that you have a score of 700, a potential lender may see a different number when they pull your credit.
That being said, there is no “magic number” when it comes to getting approved for new credit. A higher score means you pose less risk to the lender. 700 is a good credit score so getting approved for a loan shouldn’t be a problem. But keep in mind that lenders take into consideration a variety of factors, not just your credit score.
Credit Scores By Age In Canada
Canadian credit scores can go up and down according to several factors, such as a credit user’s payment history and credit utilization ratio. The average credit score in Canada can also vary based on what age group you’re looking at:
|Age||Average Credit Score|
|18 – 25||692|
|26 – 35||697|
|36 – 45||710|
|46 – 55||718|
|56 – 65||737|
As you can see, credit scores tend to rise with older generations, most likely because younger people often have shorter credit histories and are more prone to debt problems. Plus, by age 18 – 25, many users are only applying for their first credit cards.
Most Canadians also start borrowing larger credit products, like mortgages, once they reach their thirties and have likely managed to pay off their biggest debts by the time they retire, both of which can be beneficial for a credit score if done responsibly.
Credit Cards And A 700 Credit Score
If your credit scores all fall around the 700 mark and you’re interested in trying to improve them, you maybe want to consider taking out an additional form of credit like a credit card. Here are a few factors to consider first:
- Does the credit card come with benefits that fit your lifestyle?
- Will you be able to responsible use a new credit card?
- Will you make the payments on time every month?
|Credit Card||Annual Fee||Interest Rate||Earned Rate|
|Best Western Mastercard®||$0.00||19.99% on Purchases||22.99% interest on:|
– Balance Transfers
– Access Cheques
– Cash Advances
|BMO Cashback Mastercard®||$0.00||19.99% on Purchases||22.99% on cash advances (21.99% for Quebec residents)|
1.99% on balance transfers for the first 9 months
Plus a 1% transfer fee
|BMO Preferred Rate Mastercard®||$20.00 (waived the first year)||12.99% on Purchases & Cash Advances||3.99% introductory rate on balance transfers for the first 9 months (12.99% after 9 months)|
|Home Trust Preferred Visa||$0.00||19.99% on:|
– Balance Transfers
– Access Cheques
– Cash Advances
|1 % base earned rate|
1% unlimited cash back on eligible purchases
|MBNA Rewards Platinum Plus Mastercard®||$0.00||19.99% on purchases||24.99% interest on cash advances |
22.99% on interest balance transfers
|MBNA Smart Cash Platinum Plus Mastercard®||$0.00||19.99% on purchases||24.99% interest on cash advances|
22.99% interest on balance transfers
Personal Loans And A 700 Credit Score
With a 700 credit score, you can qualify for most personal loans too. Typically, lenders want your score to be at least 650 before they’ll approve you unless you’re applying with a company that specializes in clients with poor credit. This is particularly true with banks and credit unions, where approval standards are tougher.
If you need a personal loan but your credit score prevents you from qualifying with your financial institution, try applying with an alternative lender. Here, requirements are often easier so getting approved may also be easier.
Car Loans And A 700 Credit Score
A car loan can also be relatively easy to get with a 700 credit score. In fact, some financing locations will approve you with a lower score. When it comes to taking on a car loan, the most important thing to do is to not overextend yourself. We all want to drive a nice car, but it’s important to choose one you can comfortably afford.
Learn how to budget for a car.
Mortgages And A 700 Credit Score
As mentioned, mortgages can be significantly harder to qualify for, especially if you don’t have stellar credit. Most traditional mortgage lenders want you to have a credit score of at least 680 before they’ll approve you for a decent loan and rate. To be eligible for the best mortgage conditions possible, a minimum credit score 750 is ideal.
Don’t forget that your credit score is only one piece of the puzzle when it comes to getting approved for a mortgage. You will need to pass the stress test, have an adequate down payment of at least 5%, have a manageable debt to income ratio, just to name a few requirements.
How To Improve Your Credit Score From Fair To Excellent
If you’re interested in working on improving your credit scores, there are a few things you can try. Everyone’s credit score reacts differently. This means that these tips may work well for one consumer but not another.
- Paying Bills On Time – Your payment history makes up about 35% of your credit score. If you consistently pay your debts as stated in your contract, you could see your credit score improve.
- Lower Your Credit Utilization Ratio – By increasing your credit limit and spending less of your available credit, you may be able to lower your credit utilization ratio. Experts recommend a ratio of 30% or lower for the best results.
- Monitor Your Credit Report & Score – You’re allowed one free yearly copy of your credit report from Equifax and TransUnion. You can also request your credit score for an extra fee. Do this regularly to make sure your credit is in top shape.
- Get Errors Removed From Your Credit Report – Your 700 credit score might be caused by a mistake on your credit report. When you get your free credit report, read it properly then report any errors to the associated credit bureau. Only actual errors can be removed from your credit report.
- Watch Out For Fraud & Identity Theft – Having your identity stolen could potentially damage your credit if the suspect in question applies for and misuses credit cards or loans in your name.
- Don’t Apply For Too Much Credit – Responsibly managing some debt, for example of car loan, can help to improve your credit over time. Just make sure you take on debt that you can afford and manage. Too much debt, for example, maxed out credit cards have the potential to hurt your credit.
Is a 700 credit score good?
Where can I check my credit score?
What is the average credit score in Canada?
A 700 Credit Score Isn’t a Bad Thing
A 700 credit score isn’t the greatest or worst thing in the world. Even though you may qualify for less appealing rates and conditions, getting approved for basic credit products shouldn’t be too much of a struggle. Nevertheless, if you plan to use credit regularly, a higher score is definitely important to maintain whenever possible.
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