Find out the things that you need to know about the credit score in Canada.
Get to know the credit score meaning Canada by reading the information below.
As you all know, a credit score is a number that is three digit and is calculated with the use of a particular formula that is based on the information of the credit report that you have. The score will be the basis of lending companies whether they will approve you or not. The credit score in Canada ranges from 300 to 900.
Who Makes the Credit Score
Some agencies are responsible for creating credit reports which will be a basis of the credit score that you will have. Two of the main agencies are the TransUnion Canada and Equinox Canada. They are responsible for selling credit reports to credit unions, banks, and other financial institutions.
Who Uses The Score
Your credit score and report can only be used to meet a needed direct business, provide you with your required insurance, for a job or a house rental, and for lending money. Always put in mind that landlords, employers, and lenders can only access your credit report if you allow them to.
What is a credit score in Canada
If you are one of the many people who is asking about what is a credit score Canada, then you definitely should read the information below.
It is always important to monitor your credit score for you to know where you stand when it comes to lending companies. Fortunately, you can now check your credit score for free with the use of Borrowell because they have partnered with Equifax Canada. Get to know more about these two companies by reading the information below.
Borrowell
Borrowell is a fintech lender company in Canada which offers fast, friendly, and fair loans to people who need it the most. They have fix interest rates that are affordable.
Equifax Canada
Equifax gathers credit reports, which include your payment history, your debts, and the length of the credit that you already have. They have grown from a credit consumer company to a leading provider of credit score around the globe.
How are credit scores calculated in Canada?
In Canada, credit scores are calculated to show your creditworthiness which is useful for the lending institutions to identify the level of risk involved in lending you loans such as mortgage or home loans. The credit score ranges from 300 to 850. Higher the score, better are chances of you repaying your loans and hence, lower the risk for the lenders.
The credit score is determined by giving your payment history the 35 % weight. Followed by, the amount you already owe as 30%. The weight of 15% is given to the length of your credit history. The new credit applications that you have made and the type of credit that you have used in the past account for 10 % each.
Explanation of credit score ranges in Canada
Knowing the explanation of credit score ranges in Canada is essential for you to understand them fully well.
Getting your loan or credit card approved will depend highly on your credit score. Not everyone is familiar with the ranges of credit score in Canada, which is why familiarizing yourself with them is important. Below are the credit score ranges that you need to know.
Poor
Poor credit score ranges from 300 to 559. According to a study, almost 4% of the population in Canada has this score. This can cause difficulties when applying for loans and credit cards.
Good
Good credit score ranges from 660 to 724. 15% of the population has this score. This credit score can help you to obtain a loan or a credit card but with added requirements.
Excellent
An excellent score ranges from 750 and above. 57% of the population has this score. They can quickly obtain every loan or credit card that they need without providing requirements.