If you live in Canada, you’ve likely heard the term “credit score” before, and know that it’s important for qualifying for loans, applying for mortgages on property, or even getting a new job. But what is a “good” credit score?

A credit score is a number ranging between 300 to 900. In general, the higher your number, the better your score. A “good” credit score is normally thought to be between 750 and 900. But there’s more to it than that.

Canadian credit scores are calculated by two major credit bureaus: Equifax and TransUnion. A number of factors make up your credit score, including your credit history, your loan payment habits, and how much debt you carry.

In general, a high score is considered better because, to a lender, it signifies you’re less likely to default on a loan. It’s often taken to mean that you have a good credit history, you make your loan payments on time, and you’re not carrying too much debt that another loan will make it unmanageable.

Breaking down the scores:

780 – 900: This is considered an excellent credit score.

720 – 779: This is typically considered “good” credit and most lenders are likely to extend a loan at a low interest rate.

680 – 719: This also considered a “good” credit score and you should have little to no trouble securing a loan.

620 – 679: This is still a good range, but you may receive slightly higher interest rates on a loan.

580 – 619: Those with this score could be considered high risk. It may be difficult to get a loan, and if you do, you’ll likely be paying higher interest.

500 – 579: Your credit needs work and you are almost in the danger zone. Scores in this range will rarely be approved, but credit can be repaired.

Less than 500: If your credit score is below 500, your credit is considered terrible. You likely won’t be approved for any loans and should seek credit improvement help.

Many people think that if they are making minimum payments every month, they have “good” credit. But that’s not always the case. Most of the time, credit scores have nothing to do with the minimum payment.

Your credit score can be hurt by a number of factors:

• Late or missed payments.
• Too many or too few open credit accounts.
• High credit balances.
• Too many credit applications in a year.

If you’re in need of credit repair, one of the best ways to go about it is by making your payments on time and paying your bills in full each month. And it’s not only your credit card or personal loan bills that factor into your credit score. Other debts, such as your cellphone bills, may be taken into account.

If your credit score is below 680, getting it over that number should be your first goal, in addition to making all your payments on time. If you’re in a situation where you’re overloaded with debt, your credit is maxed out, and minimum payments are all you can make, it may be time to take further steps to improve your credit situation.

Qualified credit counsellors, such as the team at Fuller Landau Debt Solutions, can help you take concrete steps towards achieving a “good” credit score and managing your debt once and for all. The best part? You can schedule a consultation today, absolutely free of charge. Call us at (416) 927-7200 or visit www.fullerdebt.ca.