An 800 credit score isn’t the highest one in Canada, but it might as well be. At this point, you get all the same perks as someone with the holy grail of scores.On the exhilarating journey to financial independence, a high credit score unlocks a ton of financial perks and opportunities. It’s not just a 3-digit number, it’s a doorway to cheaper credit, more flexible terms, better rewards, and more.
Specifically in Canada, an 800 credit score puts you in an elite class of borrowers. But what does this magical number really mean and more importantly, how do you reach this financial milestone? Let’s demystify these questions. Now, we’ll equip you with the right tools and strategies to help you build an 800 credit score for yourself.
But first, what is a credit score and why is it important?
A credit score is a three-digit number that tells lenders how reliable you are to repay loans and manage credit. Before issuing any loan or credit product to anyone, lenders will first check your credit score. As a result, your credit score determines your access credit when you need it, the terms, and the interest rate. Why is that important?
In Canada, credit scores range from 300 to 900, with 300 being the lowest and 900 being the best. With lower credit scores, you are less likely to qualify for a loan of your choice. A higher credit score, on the other hand, will help you get the loans you want.
Believe it or not, your credit score can affect your lifestyle and standard of living. So, you should strive to get a high credit score to help you secure loans with better terms. It can even help you edge out the competition on that great apartment or your dream job. Here’s what you need to know about an 800 credit score in Canada.
What does an 800 credit score mean?
According to Equifax, an 800 credit score is considered excellent. In Canada, the top credit bureaus, Equifax and TransUnion, decide what the credit score ranges are. Each one uses a slightly different method of calculating your credit score. That means that what one credit bureau might call an excellent score, the other might consider it to be just “very good.”
However, both use the same core factors and weigh them similarly, such as your:
If you have an 800 credit score and apply for loans, you are far more likely to get better terms and the lowest rates. In addition, you also have access to some of the best rewards credit cards and cash back credit cards on the market.
With an 800 credit score, you qualify for almost every type of loan available. Moreover, such an excellent score will allow you to enjoy quick and easy loan approvals whenever you apply. The ‘800 Club’ is a popular name for customers whose credit scores are 800 and above.
Habits that get you into the 800 Club
People with an 800 credit score did not just get there by chance. It took discipline and consistency to practice good financial habits. If you want to join the club with your own 800 credit score, here’s what you need to do:
What an 800 credit score can do for you
An excellent 800 credit score comes with a lot of amazing benefits. First and foremost, you should have no problem getting approved for loans and other credit products.
Quick & easy approvals
Many financial institutions have a minimum credit score requirement before approving anyone for a loan. Most times, this minimum requirement is in the mid to low 600s. An 800 credit score is well above the minimum threshold, making you a shoo-in based on your score alone. Keep in mind, that lenders also look at other aspects of your financial profile to make sure you can handle a new debt obligation before they approve you. But an 800 credit score won’t be the hangup if there even is one.
Lower interest rates, lower payment, and lower cost of credit
An excellent credit score can also give you lower interest rates. A well-known fact is that a higher credit score will make you eligible for larger loans with more favourable terms and much lower interest rates. In addition, a higher credit score will make it easier to pay back your loan because lenders will be more flexible, and your payments will be lower thanks to lower interest rates.
Higher credit limits, better rewards, and even discounts
Many lenders put much more faith in borrowers with excellent credit scores. This is because their excellent credit score is a by-product of good financial management.
Also, you will qualify for higher credit limits and better rewards on credit cards. A higher credit limit automatically gives you higher purchasing power. It also provides you with the best offers on loans, mortgages, better insurance rates, and everything reserved for people with excellent credit scores.
This article is the shortened version of an article originally published on Hardbacon.ca by Arthur Dubois under the title "What Does an 800 Credit Score Mean in Canada?".
