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What is a Good Credit Score (and How Do I Get One?)

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Credit is essential to navigating today’s world. It is one of the most significant factors determining our ability to live, work, move, borrow, and communicate. For this reason, one of the first things we are taught about financial literacy when we are young is the absolute necessity of having and maintaining a good credit score. 

Good or bad credit can affect our ability to secure a mortgage or auto loan, can help to secure lower interest rates (and higher limits) on credit cards and lower car insurance premiums. It can make our break a rental application for an apartment and even determine the upfront cost of our cell phones.

But what is a good credit score and why is it considered so vitally important?

What is a credit score?

A credit score is a number used by companies to determine the risk of lending to a particular individual.

Simply put, it allows the company to predict how likely you are to pay your bills on time. If your credit score is high, you are more likely to pay on time and therefore are considered a “safer” investment that someone with a lower score, making businesses more likely to do business with you.

Your credit store is determined by a number of factors, including your payment history , your used credit vs. your available credit , the length of your credit history , whether you have a history of bankruptcy, or have had collection issues in the past, and the number of inquiries into your credit file .

Furthermore, this number may vary between the two national credit reporting agencies— Equifax and TransUnion —as these bureaus determine their scores using different scoring algorithms

What is considered a good credit score?

Credit scores range between 300 and 900—with 300 being the lowest score and 900 being the highest. As previously stated above, each of Canada’s main credit bureaus weigh certain factors differently and thus have differing—although closely related—standards of what constitutes a good score.

TransUnion assigns a letter grade to their scores, considering a score of 658-719 to be fair and therefore deserving of  a C grade, a score of 720-780 to be good and therefore deserving of a B grade, and a score of 781-850 to be excellent, earning the borrower the coveted A.

Equifax, however, considers scores from 580-669 fair , from 760-739 good , from 740-799 very good , and upwards of 800 excellent .

But remember—these numbers are not set in stone. There are many simple and practical ways to improve your credit score, even if you have declared bankruptcy or experienced serious collection issues in the past.

How do I improve my credit score? 

Here are some tips from Equifax , TransUnion , and the Government of Canada on improving your credit score: 

Pay your bills on time

Even if you cannot afford to pay them in full, making the minimum payment is a great way to get yourself on the right track. If you think you will have trouble paying a bill, contact the lender right away. Additionally, you should continue paying your bills even if you are embroiled in a dispute with the lender.

Watch credit card balances (and use credit wisely!)

While this can be a difficult ask, it is important to make sure you are not using too much of your available credit, as this can negatively affect your score. Also—avoid going over your credit limit. Borrowing more than the authorized limit on your card can lower your credit score.

Alert banks and credit card companies when you move

This sounds like a no brainer—but failure to inform your bank or other lenders of a move can result in missed payments. After all, you can’t pay your bills if you haven’t received them, right? A great way to avoid this issue is to sign up for paperless billing, keeping track of and paying your bills in a single place online. 

Apply for credit sparingly

Applying for multiple credit accounts within a short period of time can negatively affect your credit score because it signals to lenders that you are urgently seeking credit or trying to live beyond your means. You should, therefore, limit the number of times you apply for credit, shop around for cars or mortgages in a short window of time, and only apply for credit when you need it.


We understand how overwhelming debt can be. But remember—your story isn’t over yet. If you are seeking advice on managing your credit, speak with one of Crawford, Smith, and Swallow’s experienced Licensed Insolvency Trustees (LITs) today . Visit our website to book your free consultation .

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