What is so important about an 800 credit score? A credit score in this range is a significant accomplishment, as it’s a reflection of responsible financial habits. By achieving a credit score of 800, you’ll have far more financial opportunities accessible to you and can take advantage of lower interest rates and favourable loan terms.
With hard work and careful attention to debt, income, and payments, an excellent credit score of 800 is possible.
Key Points
- A credit score of 800 is considered ‘excellent’.
- Having an 800 credit score can make it easier for you to access a variety of financial products at lower rates and better terms.
- Achieving an 800 credit score takes time and responsible financial habits, including making timely bill payments and keeping your credit utilization low.
Is An 800 Credit Score In Canada Considered ‘Excellent’?
Yes, a credit score of 800 is classified as ‘excellent’. To reach a credit score this high, you’ll need to practice good spending and borrowing habits. That includes paying your bills on time, keeping your credit card expenditures low, and avoiding too many loan applications.
Do note that attaining an 800 credit score in Canada takes a while, so you’ll need to practice patience while taking steps to build a healthy credit profile.
Do You Know What Your Credit Score Is?
It’s best to apply for a credit product when you have good credit, and an 800 score would certainly put you in a great position. However, you won’t know what your credit score is without checking it first.
Fortunately, it’s relatively easy to check your credit score. You can do so for free with the credit bureaus, some banks and third-party providers such as Loans Canada CompareHub.
What Your Credit Score Means?
- Excellent Credit Score Range: 760 – 900
- Very Good Credit Score Range: 725 – 759
- Good Credit Score Range: 660 – 724
- Fair Credit Score Range: 560 – 659
- Poor Credit Score Range: 300 – 559
Learn more: Credit Score Range In Canada: What It Really Means
What Are The Benefits Of A Credit Score Over 800 In Canada?
Being in the top tier of credit scores definitely has its perks. Let’s take a look at the benefits of being in the 800 Credit Score Club.
Easier Loan Approval
You’ll have an easier time getting approved for loans and credit products, like personal loans, mortgages, car loans, and credit cards.
Lower Interest Rates
Lenders offer the lowest interest rates to borrowers with higher credit scores. A score of at least 800 can help you secure lower rates on loans and credit products, which can help you save a lot of money.
Better Loan Terms
With excellent credit, you may qualify for longer loan terms and more flexible repayment schedules.
Higher Credit Limits
Credit card providers may be more willing to offer higher credit limits if you have excellent credit, which can give you more financial flexibility and even help you keep your credit utilization ratio low.
Premium Credit Cards
Many premium credit cards that come with higher rewards, cashback, or travel perks are typically only available to those with excellent credit.
More Negotiating Power
With an excellent credit score, you may be in a better position to negotiate lower rates and more favourable terms with lenders and creditors.
Better Chances Of Getting A Job
Some employers check credit scores of job applicants as part of the interview process. This is more likely with jobs that deal with money or sensitive data.
Better Chances Of Getting An Apartment
Landlords may also ask to review your credit report and check your credit score as part of the tenant screening process. The higher your credit score, the better the odds that you’ll make your rent payments on time in the eyes of the landlord.
Note: It’s important to understand that credit scores in the 800s will likely benefit you when applying for new credit, a loan, or even an apartment. But, remember that your credit is not the only factor used during the approval process for these products and services.
How To Get An 800 Credit Score In Canada
When it comes to being a part of the 800 Credit Score Club, there are a few credit habits that most members have, including the following:
Pay On Time, All The Time
Your payment history is the most important factor used during the calculation of your credit scores. It counts for roughly 35%. This means you must always pay on time, with no exceptions.
Be Mindful Of Credit Card Balances
The relationship between your credit card limit and balance is factored into your credit score. Maxing out your credit limit may impact your credit scores, this is why it’s a good habit to keep your credit utilization ratio low.
Don’t Close Old Credit Card Accounts
The total age of your credit accounts as well as the age of your oldest and youngest accounts are taken into consideration when your credit scores are calculated. This is why it’s good practice to keep your older credit cards open and active.
Only Apply For Credit When Absolutely Necessary
When you apply for new credit and the lender or creditor performs a credit check, a hard inquiry is listed on your credit report. A hard inquiry can affect your credit scores, so applying for new credit only when needed is a good habit to establish.
Be Realistic
Only apply for credit that you can realistically afford, and avoid overspending. By doing so, you will be building a healthy and lengthy credit history, which is another important component of your credit scores.
Make Use Of Various Account Types
Certain credit scoring models favour individuals who have a variety of account types. Over time, gradually adding different accounts, such as credit cards, auto loans, student loans, and mortgages, may boost your credit score.
Repeat Your Habits And Track Your Progress
Consistency is crucial when it comes to credit scores, this means that you need to develop good habits, repeat them and track your progress.
Start As Soon As Possible
Credit scores build over time. The longer you consistently and responsibly use credit, the more likely it’ll help build your credit scores. As such, the earlier you start working on your credit, the longer you’ll have to build your payment history and credit history, which are common factors used to calculate your credit scores.
Monitor Your Credit Score
Be sure to check your credit regularly. Not only will it allow you to better understand your credit position, but it will also help you keep track of your credit progress.
Create (And Stick To) A Budget
While budgeting doesn’t have a direct impact on your credit scores, creating a budget can help you better manage your money and spending. In turn, this will help you avoid taking on debt you can’t afford, maxing out credit cards, and missing payments. There is no cookie-cutter solution to managing your finances because everyone’s financial situation is unique.
Learn more: How To Improve Your Credit Scores
Can You Get A Personal Loan With An 800 Credit Score In Canada?
With a credit score of 800, getting approved for a personal loan should be easy. Borrowers with this score are considered very low-risk, which makes it easier to access personal loans with low interest rates and flexible terms. However, other factors will still be assessed, such as income and debt load.
Learn more: What Credit Score Is Needed For A Personal Loan?
Can You Get A Car Loan With An 800 Credit Score In Canada?
Like personal loans, car loans should be easy for borrowers with 800 credit scores to secure. Further, they should also be able to get the lowest rates and most favourable loan terms.
For example, with an 800 credit score, you may qualify for special offers such as 0% financing or 0 down payment car loans.
Can You Get A Mortgage With An 800 Credit Score In Canada?
Considering the very high loan amounts required to buy a home, mortgages can be more difficult to qualify for. That’s why it’s best to apply with a very high credit score to ensure you can get the highest loan amount possible with the lowest rates. And with a credit score of 800, your chances of getting this is quite high.
That said, there are other factors involved in getting a mortgage in Canada, including passing the mortgage stress test, making a minimum down payment of at least 5% (on home prices up to $500,000), and having a low debt-to-income (DTI) ratio.
Can You Get A Credit Card With An 800 Credit Score?
With an 800 credit score, you should be able to qualify for most credit cards in Canada, including premium cards. Keep in mind, however, that credit card issuers will also look at other factors, including income levels and debt loads. Premium cards in particular typically have minimum income requirements in addition to credit score requirements, so you’ll also have to meet those criteria to get approved.
Taking On Debt To Build A High Credit Score
Building credit in Canada often requires taking on debt, though there are some other ways to build a positive credit history. While taking on debt to build good credit can be a strategic approach, it requires responsible spending habits and careful planning. If you add too much debt to the books and have trouble repaying it, you could be negatively affecting your credit.
Here are some pros and cons of taking on lots of debt to build or improve your credit score:
Pros
The following are some advantages of taking on more debt to build good credit:
- Build Payment History — Regular, timely bill payments play a key role in improving your credit score. If you’re able to make your payments by the due date every billing cycle, your credit score can improve.
- Prove Your Creditworthiness — Taking on debt and managing it responsibly proves to lenders and creditors that you can handle debt appropriately. This can increase your chances of loan approval at lower rates and better terms.
- Increase Credit Limits — If you’re able to manage your credit accounts successfully, you may be offered higher credit limits, which can help keep your credit utilization low if you keep your spending in check.
Cons
There are important risks to consider before adding more debt as a means of building a positive credit profile:
- Risk Of Borrowing Too Much — Taking on too much debt can potentially make it more difficult for you to cover your payments if your finances are not strong enough.
- Potential To Miss Payments — If you struggle to make your bill payments because of your excessive debt load, your credit score may suffer.
Final Thoughts
Being part of the 800 Credit Score Club has its perks, as it helps you access more financial products at better rates and terms. That said, an 800 credit score is not necessary to be successful financially by any means, as many get by with scores under this threshold. Regardless, it’s best to strive towards better credit that’s realistic for you.
