Your credit score range matters when it comes to accessing various financial products. From something as big as getting a mortgage for a home purchase to something as small as getting a cell phone contract, your credit score plays a crucial role.
That’s why it’s so important to make sure your credit score is as high as it can be. While credit scores certainly vary from one consumer to another, some have a score of 780. The question is, what does a credit score of 780 mean? Is it good? Bad? Somewhere in between?
Read on to find out what it means to have a 780 credit score in Canada.
Key Points
- A credit score of 780 is considered ‘excellent’ in Canada.
- To achieve and maintain a 780 credit score, you’ll need to make timely payments, keep your credit utilization low, and avoid applying for too many loans in a short window.
- A 780 credit score will afford you higher loan approval chances, lower interest rates, and more favourable loan terms.
Is 780 A Good Credit Score?
A credit score of 780 is very healthy. In fact, it would be considered ‘excellent’ based on credit score ranges and ratings. A score of 780 puts you in a strong financial position.
How Do Other Scores Compare To 780?
To help you understand where a credit score of 780 falls on the spectrum, the following chart details different credit score ranges and their respective ratings:
| Credit Score Rating | Credit Score Range |
| Excellent | 760+ |
| Very Good | 725 – 759 |
| Good | 660 – 724 |
| Fair | 560 – 659 |
| Poor | 300 – 559 |
As you can see from this chart, a credit score of 780 would put you in the higher credit rating tier.
What Is A Credit Score?
Let’s take things back a notch to explain what a credit score is in the first place. In Canada, credit scores range from 300 to 900. Lenders, creditors, and even some employers and landlords look at credit scores to determine your creditworthiness. The higher the number, the better.
How Is A Credit Score Calculated?
Credit scores are calculated based on a number of factors, including the following:
Payment History (35%)
Your history of either timely or missed payments weighs heavily on your credit score. Missing payments will cause it to drop while paying them on time will cause it to increase.
Credit Utilization (30%)
The amount of credit you use relative to the amount of credit available to you is referred to as your credit utilization ratio. Lenders prefer to see a ratio of no more than 30%, which can help your credit score.
Length Of Credit History (15%)
A long credit history will tell lenders how you’ve been using your credit. If you haven’t used credit for a long time, it may be difficult for lenders to tell if you have been using your credit responsibly.
New Loan Applications (10%)
When a lender pulls your credit report, this is known as a ‘hard credit check’, which can pull your score down temporarily. This can be especially detrimental if you take out too many loans in a short period of time. In this case, lenders would be concerned about how often you apply for more credit because the more loans you take out, the more difficult it will be for you to manage all your payments.
Types Of Credit Used (10%)
Different types of credit will tell lenders how you manage your money overall.
What Does Having Excellent Credit Mean?
With a score that high, you must have been making the right financial decisions in the past, including making all debt payments on time, and not maxing out on your credit cards.
That said, a score of 780 isn’t perfect. Instead, a “perfect” credit score is 900. But 780 certainly is rather close to that perfect score and can still afford you attractive terms on loans and other forms of credit. But of course, there’s always room for improvement.
The closer you can get to perfection, the better your terms will be when it comes to loans and credit cards. If you want to continue improving, consider focusing on further reducing your credit utilization and continuing to make all bill payments on time. Any improvement will not only make it easier to get approved for any loan product you want, but will also help you save a ton of money in interest.
What Are The Perks Of A 780 Credit Score?
With a credit score of 780, you have plenty of opportunities available to you:
Better Chances Of Loan Approval
You have a much higher chance of getting approved for loans and credit products with a high credit score. You may also have access to premium credit products, like rewards credit cards and those with comprehensive insurance packages.
Access To The Lowest Loan Rates
A high credit score means you’ll be more likely to qualify for loans, including mortgages, auto loans, and personal loans, with the lowest interest rates. Lenders view you as a low-risk borrower, which usually means they’re willing to offer you competitive rates.
Better Loan Terms
A 780 credit may provide you with more access to favourable loan terms, such as flexible repayment periods and higher loan amounts.
Better Insurance Premiums
Some provinces allow insurance companies to use your credit score to set their premiums. A high credit score reflects financial responsibility, which could incentivize insurers to offer you lower insurance premiums.
How Can I Get A Credit Score Of 780?
If your credit score currently falls well below the 780 mark, don’t fret. There are things you can do right now that can help improve your score and get it up to the 780 mark.
Never Miss A Bill Payment
If improving your score is on the agenda, then it’s imperative that you never miss a bill payment. Your payment history plays the biggest role in the calculation of your credit score, and if you’re late on payments or miss them altogether, your score will certainly suffer. However, the opposite is also true: by making timely payments, your credit score can increase.
Pay Down Your High-Interest Debt
If you have any high-interest debt lingering – such as credit card debt – do what you can to pay it down. Having sky-high debt loads is not good for your credit score, but paying it down can have the opposite effect. Besides, having too much debt can put a squeeze on your finances, which can make missing payments more likely.
Keep Your Credit Utilization Low
Consumers who have managed to get their credit scores close to the 800s and keep it there likely use very little of their available credit. It’s generally recommended to keep your credit utilization to no more than 30%, but it’s much better to keep it a lot lower than that. In fact, keeping it as low as 5% will help you keep your credit score as high as possible.
Avoid “Hard” Inquiries As Often As Possible
While it’s ok to take out loans sporadically, keep in mind that such loan applications will mark a “hard” inquiry on your credit report. This can cause your credit score to dip. While such dips may only be temporary, they still have some sort of negative impact on your score.
Keep Old Credit Accounts Open
Old credit is good credit. Even if you don’t use some of your old credit accounts, keep them open. As mentioned earlier, a long history of credit is a good thing, so keep those credit accounts open and manage them appropriately if you do end up using them.
Protecting Your Credit Score From Fraud
Identity thieves are rampant these days, and consumers with excellent credit scores are major targets. As such, you could be vulnerable to having your credit taken advantage of when scammers try to open up accounts in your name.
If you have a great credit score, you should do what you can to protect it. To do this, consider the following:
Monitor Your Credit Regularly
Check your credit report on a regular basis to spot any inaccurate information or suspicious activity early. To make this easy for you, you can use a credit-monitoring service, which will monitor your credit and notify you when applications for new credit are detected. These services can also help to keep tabs on any changes in your credit score. If your credit score starts to dip, you can jump into action.
Place A Fraud Alert
If you think that your personal information has been compromised, place a fraud alert on your credit report with the credit bureaus. Doing so will alert lenders to take extra steps to verify your identity before extending a loan.
Be Cautious Of Scams
Fraudsters use all sorts of tactics to steal your personal information. Never click links in emails that you’re not familiar with, and don’t provide sensitive information over the phone. Be sure to verify the source before giving out your personal information.
Be Careful With Public Wi-Fi
Fraudsters can easily hack your data if using public Wi-Fi when accessing your financial accounts or entering sensitive personal information. Instead, save these searches for when you’re at home or when using a VPN.
Final Thoughts
A credit score of 780 is certainly very high and will open the doors to several financial opportunities. But you’ll still want to remain vigilant with your financial habits to ensure your score stays at this level. You may also want to get a copy of your credit report from one of the major credit bureaus in Canada to make sure there are no errors on your report that could be unfairly pulling your score down.
