Here’s a guest post from Ed O’Brien about Credit Scores- I don’t know too much about credit scores because I never really had to worry about them (since I’m an angel and always paid my credit card bills on time lol), so I was very interested to see how credit scoring works here in Canada. Though when I got my credit score when I applied for my mortgage, I was surprised I was only in the 780’s. I think this is likely because I have some unused credit cards that are just lying around. Time for some spring cleaning, I suppose!
Your credit score is a number that evaluates the information in your credit report. A good credit score would indicate that you’ve been responsible with your credit accounts and
have paid on time. A bad credit score reveals the opposite, that you haven’t paid your accounts on time or that you’ve had to file bankruptcy to deal with your debt.
Credit scores in Canada are calculated and sold by two major credit bureaus: Equifax and TransUnion. The scores range from 300 to 900. Credit scores above 800 are the best, 760 to 799 is good, the low 700s are fair, and below 699 is a bad credit score. Lenders place a lot of importance on credit scores during the application process because statistics show that consumers with the best scores are the least likely to default on their credit cards and loans. On the other hand, delinquency rates are very high with borrowers with credit scores below 600.