When applying for a credit card, one important factor to consider is your credit score. This numerical value is calculated based on your credit history, which includes factors like the number of open accounts, total debt, and payment history. From the lender’s perspective, your credit score represents the likelihood that you’ll be able to repay your debt on time.
So, what credit score is needed for a credit card in Canada?
Key Points
- Good credit is typically required to get approved for a credit card in Canada.
- A good credit score is generally considered to be at least 660 and above.
- If you have bad credit, there may be other options available, like secured credit cards or retail credit cards.
What Credit Score Do You Need To Get A Credit Card?
In Canada, most card providers view a credit score of 660 as satisfactory, but will take into consideration a variety of factors when assessing an application. Ultimately, there is no ‘magic’ credit score needed to be approved for a credit card. It ultimately depends on the specific card provider and their requirements.
Where Can You Check Your Credit?
It’s recommended that you check your credit score before applying for a credit card, or any other credit product. This will help you gauge the likelihood of getting approved.
Both credit bureaus in Canada — Equifax and TransUnion — have their own formula to calculate an individual’s credit score. So, you actually have more than one credit score. Given this, you may want to check your score with each credit bureau to get an overall sense of your credit health.
You can check your credit score from various sources:
Credit Bureaus
Equifax offers free credit scores and credit reports to Canadians. Equifax credit scores are updated every month. You can access your free Equifax credit score online by creating an Equifax account, or by mailing a completed Consumer Request for Free Credit Report to Equifax.
TransUnion credit scores are offered for free only to residents of Quebec. All other Canadians must pay a subscription fee to access their TransUnion credit scores.
Learn more: How To Get Your Credit Score For Free In Canada
Banks
Canada’s big banks also offer their clients free credit scores. CIBC, RBC, BMO, and Scotiabank are all partnered with TransUnion to provide clients with this bureau’s credit scores, while TD Bank allows its clients to access their Equifax credit scores for free.
Learn more: Banks That Let You See Your Credit Scores
Third-Party Providers
Some online platforms make it easy for Canadians to get their credit scores for free online. Such third-party providers include Borrowell, Credit Karma, and Loans Canada’s CompareHub.
| Cost | Credit Score | Credit Report | ||
 | Free | Yes | Yes | Visit Site |
 | Free | Yes | Yes | Visit Site |
 | Free | Yes | Yes | - |
How Your Credit Scores Affect Your Ability To Get A Credit Card
Your credit score plays a key role in your ability to get approved for a credit card. More specifically, your credit score affects the credit card application process in the following ways:
- Chances Of Approval: A good credit score increases your chances of getting approved for a credit card, as it shows lenders that you’re responsible with your finances.
- Interest Rates: Higher credit scores usually mean lower interest rates, helping you save money in interest.
- Credit Limits: Strong credit can help you secure a higher credit limit, giving you more spending power.
Factors That Affect Your Ability To Get A Credit Card
Credit card issuers will also look at other factors besides your credit scores when reviewing your application.
Income
Income plays a significant role in your ability to secure a credit card because it shows creditors your financial capacity to pay back what you spend on credit. Lenders look at your income to make sure you have enough financial stability to handle credit card payments, including monthly bills and interest charges. A higher income also reduces the creditor’s risk, which increases your odds of approval and higher credit limits.
Employment Status
Credit card providers prefer to offer credit to those who are employed full-time. Students, retirees, part-time workers and self-employed workers may find that they are eligible for lower credit amounts and have limited options in regard to which credit card they qualify for.
Debt-To-Credit (DTI) Ratio
Your debt-to-credit ratio refers to the amount of revolving credit you have versus how much you’ve used. Credit card providers will usually consider how you have utilized previous credit accounts. Generally, lenders like to see debt-to-credit ratios no higher than 30%, as higher ratios can be a sign of overuse of credit or an inability to properly manage debt.
Credit History
Credit history includes detailed reports of whether previous debts have been paid in full and on time, and whether you tend to keep a balance on your credit cards. Many credit card issuers will consider an applicant’s credit history to understand their long-term credit tendencies and whether they’re likely to repay the debt they owe.
Best Credit Cards For Your Credit Score
| Credit Card | Interest | Annual Fee | Credit Score Required |
| BMO Cash Back Mastercard | 20.99% | $0 | Fair to good |
| WestJet RBC World Elite Mastercard | 20.99% | $119 | Good to excellent |
| KOHO Prepaid Mastercard | N/A | $0 | No credit checks |
What Kind Of Credit Card Can I Get If I Have Bad Credit Or No Credit?
Those with a credit score below 650 could potentially find it difficult to be approved for premium credit cards. However, there are a few different types of credit cards that you can still qualify for if you can’t meet the approval requirements.
Retail Credit Cards
Many retailers have partnered with banks or banking networks to provide retail credit cards. Typically, retailers have less stringent requirements and may not even require a credit check.
A retail credit card usually offers special discounts and loyalty rewards programs for their store, as long as you keep your account in good standing. However, many retail credit cards come with higher interest rates, which can increase your interest expense if you don’t pay off your account balance each month.
Prepaid Credit Cards
Prepaid credit cards are another alternative for those with low credit scores. These cards require the cardholder to top them up with cash before any purchases can be made.
After funds have been added to the card, it can be used just like any other credit card. While most prepaid cards don’t have a rewards program, there are some providers that do offer cash back rewards and other perks like a credit card.
It’s important to note that a prepaid credit card will not help you build your credit, as it’s not a credit product and payments are not reported to the credit bureaus.
Student Credit Cards
Students may want to consider applying for a student credit card. These cards are designed for full-time students and have less stringent qualifications and requirements. They typically have no annual fees and a decent rewards system.
However, student credit cards tend to come with lower credit limits, which can lead to high debt-to-credit ratios. That said, they can help students build their payment history while still in school, which may positively affect their credit scores.
Secured Credit Cards
A secured credit card requires a deposit, which becomes the account’s credit limit. If the cardholder fails to make payments, the lender will simply use the deposit to pay off the balance.
Most secured cards don’t offer a rewards system, but the payments you make may help you build credit.
How To Build Your Credit In Canada?
If you want to increase your chances of getting approved for a premium credit card, you may want to take some time to give your credit score a boost if required. There are many different ways to build your credit scores, though the following are the main factors that impact your credit:
- Payment History – This factor accounts for around 35% of your credit score calculations. As such, making full on-time payments can help build your credit.
- Debt-To-Credit Ratio – Your debt-to-credit ratio is another factor that may affect your credit score. It refers to the amount of credit you’ve used versus how much you have available. Typically, it is advised that consumers use less than 30% of their total available credit.
- Credit Age – The average age of all your accounts can also impact your credit scores. Having old accounts in good standing can have a positive impact on your credit score.
- Credit Inquiries – In general, it’s recommended that you don’t apply for too many credit products within a short period of time. Too many hard inquiries can hurt your credit and signal financial difficulties to future lenders.
- Public Records – If you’ve filed for bankruptcy or a consumer proposal, they’ll show up under public records on your credit report. This can affect your ability to get a credit card.
Final Thoughts
While your credit score plays an important part in the credit card application process, it is not the only deciding factor. There are many different types of credit cards that suit individuals with varying financial situations. As always, it’s important to do some due diligence to figure out what options work best for you, and to spend within your means even when approved for credit.
