Averages in Canada, and when to think more about your score
Your credit score is your monetary portfolio. Every individual has a unique one based on their personal financial position and all that factors into it.
There is a numeric number between 300 and 600 to pinpoint a person’s score. The Government of Canada explains how credit ratings work in North America. They even delve into how being high on the scale means less liability and uncertainty for the company who is lending. Vice versa, a lower score means more risk.
Why does it matter so much?
Every person who has applied for credit or a loan in the past has a credit score. Everyone should know what it is. All the companies that handle your finances send information about your money. Your credit score can affect lots in your life; when you try to buy a house or a car, get a new job, or even take out student loans.
Equifax and TransUnion are the two big credit bureaus in Canada at the moment. There was a big security breach for Equifax earlier this year, so beyond knowing the score, you should take steps to make sure your finances are protected.
Money Sense states there being five main factors that go into determining each one based on, “payment history, outstanding debt, credit account history, recent inquiries and types of credit.” For example, factors such as whether you have a bad habit of not paying bills on time, or how much debt you owe versus your limit. Even how many accounts you handle.
What is a good credit score versus bad credit score?
Though the earlier mentioned Money Sense article claims the typical Canadian score is around 700, and, “Anything under 620 could affect your ability to secure a loan.”
A different point of view is being over 700 doesn’t matter because they are “a no-brainer” and will be given approval this article states from The Globe and Mail. But, the score may likewise shift in an instant from your actions.
How are Canadians doing?
Canada CreditCards.com shows statistical information from 2015 from Equifax, which conveys the most common rating was between 680 and 749. Canadians within that margin were 21.4%.
Those with the safest numbers (750 or above) were at 60.51%. Those under 520, or “extreme risk” were only at 2.85%.
Loans Canada delves even further into the numbers and states chances are doubtless a person with a score of 780 or higher gets permission for a loan. Though, “Individuals whose credit scores are less than 500 will not get approved for new credit and should seek credit improvement help.” In between those, there will be a higher interest rate because of the risk, getting loans won’t be easy, and individuals should look into repairing scores if under 579.
Want a comparison of those in the U.S.? Likewise, with 2015 info, an article from Value Penguin states, “The average credit score in the United States is at an all-time high of 695. Though different scoring models exist, which cause this figure to fluctuate by a few points, most fall between 660 to 720.”
Canadians and those from the U.S. are doing well on average! But if you want help, ways to approach raising your score are possible!
Do you think you need to make some changes to your credit score?