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If you’re looking to buy your first house, have dealt with debt in the past, or are simply trying to take control of your overall financial health, understanding your credit scores can be helpful. But what about good credit? Everyone wants to know. What is a good credit score? And who decides whether or not your credit scores are good?

You’re not alone if you don’t know everything you should about your credit score, below we’ve compiled everything you need to know about your credit scores.

What Is Considered A Good Credit Score?

Credit scores range from 300 to 900, with 650 being the minimum credit score needed to get approved for conventional loans. A “good” credit score is 660 or above, and an “excellent” score is 760 or above. 

Why Is A Good Credit Score Important? 

The higher your credit scores, the more financial flexibility you will have at your fingertips. You’ll be able to access better financial products from lenders and will be able to take advantage of a lower interest rate. Higher credit limits and more competitive reward programs may also be awarded to consumers with “good” credit scores.

Keep in mind that good credit is helpful, but not the only factor that lenders and creditors take into consideration when assessing an application.

Who Decides If You Have Good Credit?

Now that you know what good credit is and why it can be helpful in certain financial situations, who decides if you have good credit? There are a variety of different scoring models used by creditors and lenders, this means that the type of credit score considered to be good by one lender maybe not be the same for another lender.

As we explain above, 660 and higher is generally considered a good credit score range. Just remember that lenders have their own unique criteria. A credit score of 660 may be a good indicator of a borrower’s creditworthiness to one lender, while another lender may only require a credit score of 650.

Free Equifax credit score

How To Check If Your Have Good Credit?

In Canada, if you want to check our credit you have a variety of options to choose from. Equifax, one of Canada’s credit reporting bureaus, offers all consumers free access to their credit score and credit report. TransUnion offers consumers in Quebec free access to their credit score.

Consider a Third-Party Credit Score Provider

You can also choose to check your credit via a third-party provider.

 CostCredit ScoreCredit Report 
CompareHub logoFreeYesYesVisit Site
Borrowell logoFreeYesYesVisit Site
CreditKarma logoFreeYesYes-

Note: Keep in mind that all these credit score providers may use different scoring models. This means that your score will likely be different, depending on the provider you choose. 

Can Good Credit Affect My Daily Life?

Credit scores are used by a variety of companies including potential landlords, banks, lenders, and insurance companies, to evaluate your credit creditworthiness. This means that your credit scores play a role in your ability to get approved for a loan, new credit, and even a new apartment.

Can Good Credit Affect Your Ability To Qualify For A Loan?

Your credit scores play a role, but not the only role, when a bank or lender is deciding whether or not they want to approve you for a loan. Your credit scores may affect your ability to qualify for a loan, but they may also affect the terms of your loan including the interest rate, term length and loan amount.

Can Good Credit Affect Your Credit Card Approval? 

Most credit card companies have minimum credit score requirements. Generally, more premium credit cards will have higher eligibility requirements such as a good to excellent credit score. These credit cards often have better rewards and perks than other credit cards

Can Good Credit Affect Your Ability To Get A Job

Some employers look at applicants’ credit scores when assessing who to hire and who to politely decline. They typically want to see applicants with a high credit score before hiring someone, especially when it comes to positions in the financial sector. They might see bad credit scores as a sign of irresponsibility and therefore might choose to hire someone else. 

While there are certainly many factors that go into the decision of who to hire for a certain position, having good credit can be just enough to put you on top. However, do remember that a potential employer is required to get permission from you before authorizing a credit check.

Can Good Credit Affect Your Insurance Premiums?

Not only will good credit afford you lower interest rates on loans, but it may also allow you to take advantage of lower insurance premiums. Insurance comes in many forms including house insurance, auto insurance, life insurance, and health insurance. Insurance premiums can cost quite a bit, but if your credit score is healthy, you may be able to snag lower rates, saving you money over the long haul.

Insurance providers usually check your credit score before they approve your application and provide you with a premium rate.

Can Good Credit Increase Your Chances Of A Lease Approval?

Like lenders, landlords want to make sure you’ll be able to make your rent payments every month, and a good credit score will provide them with more assurance that you will.

A potential landlord will also need to check your credit history as they need to assess whether you are a credit risk. A bad credit score may show them that you can’t be trusted to pay your rent on time and therefore they might rent to someone who is less of a risk. 

How To Maintain A Good Credit Score?

There are plenty of perks associated with having a good credit score. But credit scores fluctuate with time and information that is reported to the credit bureaus. Depending on the type of information reported, it can positively or negatively impact your credit scores. That’s why it’s important to be diligent with your credit habits so that you can maintain your good credit scores. Here are some ways to help you maintain “good” credit.

  • Pay Your Bills On Time – Your payment history generally accounts for 35% of your credit scores. As such, missed or late payments can negatively affect your credit. To help maintain or build your credit, paying your bills on time and in full is crucial. This includes loan payments, credit card payments, utility bills and even cell phone bills. 
  • Keep Your Debt-To-Credit Limit Low The amount of debt you have in comparison to your credit limit is another factor that can influence your credit scores. Balances that are close to your credit limit can impact your credit scores. In general, lenders like to see a low debt-to-credit ratio (around 30%).
  • Don’t Open Too Many Credit Accounts In A Short Period Of Time When you apply for a credit product, the lender will pull your credit report which is known as a hard inquiry. Too many hard credit checks can negatively affect your credit and could indicate financial distress to future lenders, which may result in your loan or credit application being rejected. 
  • Keep Old Accounts Open – Your credit history is another factor that is commonly included in the calculation of your credit scores. Try to keep old credit card accounts open, especially if they do not have an annual fee. Simply keeping these accounts open and active can help establish your credit history which can help build and maintain your good credit.  

For more tips on improving your credit take a look at this article.

Bottom Line

Whether you’re trying to get a loan, a credit score, or rent an apartment, good credit may play an important role. Not only that, but good credit scores can lead to faster loan approvals and better loan terms including lower interest rates and flexible payment options. While having a good credit score isn’t worth taking on debt or losing sleep, working to build a healthy credit history can be an important part of creating a balanced financial life.

Caitlin Wood, BA avatar on Loans Canada
Caitlin Wood, BA

Caitlin Wood is the Editor-in-Chief at Loans Canada and specializes in personal finance. She is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. Caitlin has covered various subjects such as debt, credit, and loans. Her work has been published on Zoocasa, GoDaddy, and deBanked. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security.

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